2 September 2022
Promoter – Financial Intermediary
INDEPENDENT POWER TRANSMISSION OPERATOR SA
Extension of the interconnection of Northern Cyclades through the connection of Western and Southern Cyclades (interconnection of the islands of Thira, Folegandros, Milos and Serifos) in a closed loop with the interconnected system of northern Cyclades via the GIS S/S of Naxos and with the continental Greece transmission network (HETS) via the EHV S/S of Lavrio. The project consists of five underground and submarine cables about 350 km long and the construction of four GIS substations on the islands.
Additionality and Impact
The Project will interconnect independent island systems that rely on polluting oil-based generation capacity, delivering significant economic benefits through local and general impacts by tackling multiple market failures. The Project also supports regional development and cohesion. The net benefits translate into an excellent economic profitability and broader social benefits. The Project is consistent with national and EU climate and energy goals. The financing of this Project also contributes to the Bank's lending priority objectives on Climate Action, Environmental Sustainability, and Economic and Social Cohesion. The good governance framework underpins overall very good quality and results of the Project.
The proposed operation meets the required funding needs of the promoter, by providing an amortising loan with a long tenor and an adequate pre-amortisation period, together with a sizeable financing volume. The EIB loan is expected to further improve the promoter's maturity profile as well as the diversification of its funding sources.
The project aims at increasing the security and reliability of supply in the island systems; reducing the financial and economic cost of supply to the islands by allowing the phase-out of expensive and polluting oil-based generators (only 50 MW will be kept in reserve in Thira); and at allowing the decarbonisation of energy supply to island customers, including by indirectly increasing the RES hosting capacity of local networks by 100 MW.
- Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 315 million
Total cost (Approximate amount)
EUR 524 million
By its technical characteristics the project is listed neither under Annex I nor Annex II of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU. Pursuant to Greek law, the project has been subjected to an environmental impact assessment (EIA), which was approved from the Ministry of the Environment and Energy with prescriptions on 07/06/2021. A total of approximately 26 km of the route length transit through eight Natura 2000 sites. Other sites of particular environmental importance are also interested.
Typical impacts that can be expected for the project on both terrestrial and marine environment include habitat damage or loss, noise, chemical pollution, heat and electric field emissions. The most significant impacts that have been identified are during implementation, they are limited and mostly reversible.
The permit and the underlying EIA studies confirm that, subject to the implementation of the specified mitigating measures, the project would neither have significant adverse effects on the environment nor adversely affect the integrity of any European site in relation to the site's conservation objectives.
The Bank will require the Promoter to ensure that contracts for implementation of the project have been tendered in accordance with the applicable EU procurement legislation, 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.
Signed - 16/12/2022