NICOSIA – Breaking a deadlock that would have seen consumers pay higher costs, the regulatory agencies of Greece and Cyprus reached a deal to keep the Great Sea Interconnector (GSI) electricity connection project going to Crete.

There had been a stalemate threatening progress because all the parties involved earlier accepted a framework approved by the Cyprus Energy Regulatory Authority (CERA) which said if the project was interrupted that  it “may” be permissible for CERA to approve the recovery of higher costs from consumers.

That would have been a political landmine for Cypriot President Nikos Christodoulides as it would have forced households to bear the burden for a project bringing electricity to Greece.

The accepted solution, based on a proposal of Cypriot Energy Minister George Papanastasiou, involves tapping into the country’s energy penalty fund for emissions, state broadcaster CyBC reported.

The government still will have to approve a council decision to finance part of the costs of the construction period of the project with 125 million euros ($138.01 million) over five years that customers otherwise would have had to pay.

The Cyprus cable company Nexans was involved in the negotiations and had given an ultimatum that pushed a decision to ensure the project continues, said the Greek business newspaper Naftemporiki, “The funds will be raised from the state’s revenues .,.. from the trading of pollution rights and not directly from consumers,” the site said, but adding that other sums could result in higher bills but lesser than they could have been.

Nexans had told the project’s implementing body IPTO that it would stop work on the project if an answer wasn’t found, a decision coming just as a deadline the company set was to expire.