Cyprus: EIB backs 160 MW Vasilikos power plant to support Cypriot energy transition

The European Investment Bank has agreed to support construction of a new power plant at Vasilikos in Cyprus by the Electricity Authority of Cyprus.

The new 160 MW CCGT Vasilikos power plant will enable a shift away from fossil fuels, reduce greenhouse gas emissions and other forms of air pollution.

“The important contribution of the new Vasilikos power plant to enable Cyprus to be powered by cleaner energy has been recognised by the EIB’s latest financing to the Electricity Authority of Cyprus. The new long-term EIB loan shows how the EU Bank supports transformational investment in this country.” said Professor Michalis Komodromos, Chairman of the Electricity Authority of Cyprus.

“The European Investment Bank has unique technical and financial expertise in the energy sector and is a valuable partner in Cyprus’s efforts to deliver on climate goals and move away from dependence on oil fuelled power generation, providing support in a number of energy-related projects. We welcome the EIB’s recognition of the importance of supporting the energy transition in Cyprus and their support for the new Vasilikos facility.” said Natasa Pilides, Minister of Energy, Commerce and Industry of the Republic of Cyprus.

“The European Investment Bank is supporting energy transition in Cyprus and around the world. As part of the EIB Energy Lending Policy agreed in 2019, we committed to supporting a pipeline of gas projects already under appraisal, before moving to renewables-only lending from 2021.  That’s why the EIB is pleased to provide EUR 76 million to back construction of the new Vasilikos plant to support energy security in Cyprus.  The EIB looks forward to working together with the Electricity Authority of Cyprus and other energy project partners to support future clean energy investment in Cyprus.” said Lilyana Pavlova, European Investment Bank Vice President responsible for lending operations in Cyprus.

The EIB will provide a EUR 76 million 15 year loan to finance construction and connection of the new EUR 152m plant at Vasilikos on the southern coast of Cyprus, alongside an existing energy generation facility and industrial site.

Once operational the new 160 MW natural gas CCGT plant will contribute to ensuring sufficient generation capacity to support the shutdown of outdated oil fuelled power plants.

The new Vasilikos plant will also provide flexibility to allow greater use of intermittent wind and solar power in Cyprus in the future.

The new plant will be the most efficient gas power plant in Cyprus and use state of the art CCGT technology.

The new Vasilikos power plant is expected to generate absolute carbon emissions of 380 gCO2 / kWh.

This is within the European Investment Bank’s emission performance standard of 550 gCO2 / kWh in place when the project was approved.

Since the EIB board approved the project the EIB has introduced a new Energy Lending Policy that will end all financing for unabated fossil-fuel power generation by the end of 2021.