The Independent Power Transmission Operator (ADMIE) has launched a public consultation on a revised methodology for calculating the allowed and required revenue for the Greece-Cyprus Great Sea Interconnector (GSI) cable—specifically concerning the cost allocation on the Greek side.
Revised Gearing Ratio Proposed
Under the proposal, ADMIE recommends adjusting the project’s gearing ratio—the proportion of debt to total regulated asset base—to between 50% and 60% during the construction phase, and to 40%–50% during the regulatory depreciation period. These ranges reflect a weighted average calculation of the outstanding loan balance relative to the unamortized value of the regulated asset base.
The proposed percentages take into account several key factors: the approved financing and investment plan, the remaining loan balance, the disbursement schedule, and the need to ensure the long-term financial sustainability of the interconnector’s operator—while avoiding disproportionate cost burdens on electricity consumers.
Lower Initial Leverage, Gradual Adjustment
This represents a notable shift from the earlier 2024 regulatory decision, which set the gearing ratio at 60%–80%. The new approach aims to align the financial structure with the project’s actual timeline: a lower leverage ratio is proposed for the early years, when loan drawdowns have not yet been fully executed. The ratio would then rise progressively as construction advances and disbursements occur, before gradually declining during operations as debt is repaid and the capital structure evolves.
This dynamic adjustment seeks to modernize the regulatory framework, ensuring that revenue mechanisms remain responsive to the project’s real-world development phases.
Broader Context
The GSI interconnector remains a strategic priority for regional energy integration. Recently, French infrastructure investor Meridiam became the majority shareholder in the project following a new agreement. Meanwhile, updated economic feasibility studies commissioned by the European Investment Bank are expected from both Greece and Cyprus by year-end—studies that will further inform the project’s financial and regulatory outlook.