The U.S. International Development Finance Corporation (DFC) has reportedly shown strong interest in financing the Great Sea Interconnector, a major energy project designed to link the electricity grids of Greece and Cyprus, with plans for a future extension to Israel. The DFC is said to be considering providing up to €400 million in funding for the €1.9 billion project, and may also explore the possibility of taking an equity stake in the initiative. Due diligence on this potential investment is currently underway.
In addition to DFC, other potential investors are also exploring involvement in the project. French investment fund Meridiam is conducting its own due diligence to assess a potential stake, while the UAE-based energy firm TAQA is in talks with the Greek electricity transmission system operator ADMIE. TAQA has yet to decide whether to participate independently or in collaboration with Cyprus.
Cyprus, which is a key stakeholder in the interconnector project, is expected to make a decision by the end of this month regarding its level of involvement and potential ownership share.
The DFC’s interest in the Great Sea Interconnector dates back to about a year ago. In February, ADMIE CEO Manos Manousakis and DFC CEO Scott Nathan signed a confidentiality agreement, which was followed by further discussions. The DFC later sent a letter of intent to ADMIE outlining proposed financing terms. However, progress on the project faced delays due to various challenges, including negotiations with other investors.
Recent developments, including the signing of a bilateral agreement between Greece and Cyprus in September, have helped to move the project forward. Work on the segment linking Cyprus and Israel is also progressing, with a cost-benefit analysis underway and expected to be completed by early 2025, despite challenging regional circumstances.
The Great Sea Interconnector project is seen as a critical step in strengthening energy connectivity in the Eastern Mediterranean, with the potential to enhance energy security and promote renewable energy integration in the region.
