A new agreement on power supply from the northern Turkish occupied areas of Cyprus to the southern government controlled part of the country is expected to be concluded next Monday, providing for the mediation of a private individual who will buy the electricity and resell it then to the Electricity Authority of Cyprus. The cost per kilowatt hour (kWh) is expected to be lower than the one fixed in the first agreement, since the new deal provides for cost adjustment, according to the fluctuation of international oil prices. There is a maximum of six months coverage provided in the agreement, however power supply to the free areas of the Republic will depend on real energy needs and there is no provision for minimum consumption.
Speaking to CNA, Cyprus Chamber of Commerce and Industry President Manthos Mavrommatis said that the substantial part of the deal has been concluded, with only the typical part pending, due to Bayram holiday. Mavrommatis also said that the new agreement, due to be concluded on Monday, does not provide for a fixed price per kWh. He said that in the first agreement, the cost per kWh was 0.1838 euros, while in the new agreement the price will be adjusted to current oil prices, according to standard international practice in similar agreements.
For this reason, Mavrommatis explained that he expects the cost per kWh to be lower than in the first agreement, since oil prices are expected to fall in the next months, due to lower demand and fears over a new period of recession or smaller growth of the global economy. Οn the duration of the agreement, CCCI President noted that theoretically, the deal covers a period of six months, adding however, that there is no commitment to a minimum consumption.
“There is no commitment to any amount of power supply”, Mavrommatis said, adding that supply will depend on real needs in the free areas of Cyprus, in connection to the power production capacity in the occupied areas. The new deal provides again for the mediation of a private individual, who buys electricity from the occupied areas and resells it to the Electricity Authority of Cyprus. As Mavrommatis put it “the renewal of the agreement will be done in an acceptable way”.
