Cyprus-Lebanon power link faces bankability test

Cyprus and Lebanon have agreed to study a possible subsea power cable between them. The World Bank is backing the preliminary feasibility work, which will look at whether the power is needed and whether the numbers can work (CBN Cyprus, CNA). No one has agreed to build anything. This is not a financing commitment, not a construction decision, not an engineering plan (Cyprus Mail, SigmaLive).

Some coverage framed the announcement as connecting Beirut to Europe's electricity grid. That is wrong. Cyprus itself remains electrically isolated from continental Europe. A cable to Cyprus connects Lebanon to an island, and nothing else.

Two unbuilt cables, not one

Lebanon reaches the European electricity system only if Cyprus first connects to Greece through a separate megaproject: the Great Sea Interconnector, operated on the European side by IPTO/ADMIE, Greece's transmission system operator (Cyprus Mail, Politis). Greek-language reporting treats the two projects as distinct, with different timelines and different financing logic (World Energy News).

That two-link chain is the core engineering fact. The Lebanon leg has a study. The Cyprus-Greece leg falls under the European Commission's Projects of Common Interest framework, which treats cross-border cables as tools to complete the internal energy market (European Commission). Neither link is built.

Both sides need this, but for different reasons

Cyprus is an island grid that cannot import emergency power or export surplus renewable generation. Its energy minister has said publicly that more interconnections are better for Cyprus (CNA). Interconnection is widely treated as the structural fix for high electricity costs.

Lebanon's need is more urgent. The World Bank describes Lebanon's power sector as central to the country's broader economic collapse (World Bank). The IEA's country profile shows an energy system heavily dependent on imported oil products, with no resilient electricity base (IEA). A working cable could let Lebanon import power and reduce its reliance on expensive diesel backup generators.

The bankability problem

The hard part is not the cable. It is getting paid.

A subsea interconnector earns money when it moves electricity from a cheaper market to a more expensive one. If that revenue does not cover the construction cost, someone else pays: electricity consumers, taxpayers, or development-bank balance sheets. EU regulations set out how those costs should be split and recovered (EUR-Lex Regulation 2019/943, EUR-Lex Regulation 2022/869).

Island interconnectors almost always need large public support. Malta's second cable to Sicily, reported at roughly €300 million, drew €261 million from the European Regional Development Fund (Gazzetta di Malta, Sliema News). Malta, though, is a stable EU member with functioning billing and collection systems.

Lebanon is not Malta. Any lender would need confidence that imported electricity can be billed, collected, and settled over decades. Lebanon's state utility has struggled with exactly those functions for years (World Bank). A capital-intensive cable serving a counterparty that cannot reliably pay is not just a diplomatic complication. It is a cable that gets built but never earns enough to justify its cost.

The World Bank knows this. Its own project cycle separates analytical preparation from appraisal and financing approval (World Bank Project Cycle). Funding a study is not the same as funding a cable.

The announcement is real. The European-grid claim is premature. Until Cyprus reaches Greece and Lebanon can credibly pay for imported power, this remains a study of a bridge without a bankable road on either side.