Cyprus Gets EBRD Loan to Buy FSRU

The European Bank for Reconstruction and Development (EBRD) will provide an €80 million loan ($94,7 million), alongside EU and EIB financing, for a floating storage and regasification unit in Cyprus

The EBRD is providing an €80 million loan to the Natural Gas Infrastructure Company of Cyprus (ETYFA) for the acquisition of an FSRU and the development of related infrastructure.

The FSRU will be permanently anchored about 1.3 km off the coast of Limassol in Vasilikos Bay and will connect directly to the adjacent Vasilikos power station, the largest power plant in Cyprus. 

The EU is extending a €101 million grant for the project under the Connecting Europe Facility. The remaining project costs will be funded by a €150 million loan from the EIB and a €43 million equity contribution from the Electricity Authority of Cyprus (EAC). 

ETYFA is jointly owned by the Natural Gas Public Company (DEFA) of Cyprus and EAC, both state-owned entities. The project has been desribed as a critical component in the energy strategy of Cyprus, with significant energy security, environmental and economic impacts. 

"Close to 90 percent of the island’s electricity supply relies on the importation of petroleum products and its energy system is isolated, without interconnections for electricity or gas. The new infrastructure will allow Cyprus to replace expensive and polluting heavy fuel oil with cleaner natural gas," EBRD said.

According to EBRD, the project is expected to reduce the country’s CO2 emissions by 10 percent and lead to a substantial reduction in local air emissions (sulphur dioxide, particulate matter and nitrogen oxides). 

Harry Boyd-Carpenter, EBRD Head of Energy for Europe, the Middle East and Africa, said: “This is a milestone project for Cyprus and we are proud to support it. The project will be a major step forward in Cyprus’s decarbonization trajectory. It will reduce both global and local pollution without compromising the island’s long-term transition to a low-carbon energy sector.” 

Symeon Kassianides, Chairman of DEFA and ETYFA, stated: “After a number of years of hard work we managed to lay the foundations for developing this project of major importance for the energy future of Cyprus. I would like to thank the European authorities and the EBRD for enabling us to come closer to the realization of a national vision that will allow Cyprus to make the transition to a new energy era.”