The Greece-Cyprus interconnection project, the Great Sea Interconnector (GSI), an ambitious project to connect the power grids of Israel and Cyprus with Greece continues to face obstacles, with the latest development involving IPTO’s decision to freeze outstanding payments of 70 million euros to the French company Nexans.

Uncertainties persist, particularly in the geopolitical landscape, which has become even more unpredictable following Donald Trump’s election in the U.S. Memories are still fresh from last July’s tense episode when a specialized vessel, chartered by Nexans for seabed surveys in international waters between Karpathos and Kasos, found itself surrounded by Turkish warships.

The project, overseen by Greece’s Ministries of Environment & Energy and Foreign Affairs, remains at a critical juncture. The geopolitical challenges, combined with shifting priorities within the EU and French President Emmanuel Macron’s administration, are influencing its execution.

According to reports, IPTO was expected to make the 70 million euros payment by the end of February but has opted to hold off. Government sources have revealed that the move was made in consultation with Nexans to ensure that production of the 900-kilometer cable continues without disruption. The decision aims to limit IPTO’s financial exposure amid ongoing uncertainties.

The government appears to be backing this decision, acknowledging the unpredictable geopolitical landscape surrounding the project. The current phase involves conducting seabed surveys in international waters to determine the final route for the subsea cable.

The fate of the 1.9 billion euros project is now increasingly tied to geopolitical factors, requiring continued support from both the U.S. and France. A potential failure could trigger contractual penalties, as Nexans holds claims against IPTO for its 1.4 billion euros construction contract, while IPTO may also seek compensation under the project’s regulatory framework.

Under recently passed legislation, if the project is delayed or canceled due to external factors beyond the control of the implementation body and its contractors, IPTO would be compensated by the state for 13% of its expenses.

Overall, Greece would need to recover 50% of the total costs, with the remaining 37% covered by a regulatory decision that would pass the burden on to consumers.