Meridiam’s 66% Meets Tariff Test

French infrastructure investor Meridiam now controls the company behind the Great Sea Interconnector, the planned undersea electricity cable linking Crete to Cyprus. The deal signed on 5 August gives Meridiam 66% of the project company, while ADMIE, Greece’s electricity transmission operator, keeps 34% and remains in charge of the technical side (Enerdata, energynews.pro). On paper, that makes the cable easier to sell to lenders. It does not yet show that Meridiam is ready to finance it or that the cable is ready to be built.

What changed and what didn't

The project sits inside a special-purpose vehicle, or SPV: a ring-fenced company that holds the rights, contracts and future revenues of the cable. Meridiam taking majority control matters because the project is no longer resting mainly on ADMIE’s balance sheet. It now has a private infrastructure investor whose usual business is to hold regulated assets for decades.

That is the profile banks like. It is also familiar territory for Malta, where regulated infrastructure and long-term public payments often decide whether projects get built at all.

What Meridiam has not bought is a settled route, committed bank financing, regulatory approval to recover costs through electricity bills, or visible proof that a cable manufacturer has placed GSI in its delivery schedule. Nexans qualified its deep-sea technology for 3,000-metre depths in late August, which helps the technical case. But Nexans’s January statement referred to a “schedule rearrangement”, and its H1 2026 results did not tell investors that execution of GSI had started.

The revenue question lenders need answered

Greece’s energy regulator, RAAEY, was still consulting until 11 September on the number that matters most: how much the project company will be allowed to recover from electricity users over time. Banks lend against that promise. Until regulators set the formula, no lender can properly price the risk.

Part of the formula is the WACC, the weighted average cost of capital. In plain terms, it is the return regulators allow investors and lenders to earn through system charges. ADMIE proposed lowering the assumed debt share during construction to 50%–60%, from an earlier 60%–80% range (OT, Sigmalive). A lower assumed debt share usually pushes up the allowed return. That helps equity investors such as Meridiam, but it also means higher charges for users.

Cyprus is deciding whether consumers start paying before the cable exists

Cyprus is the immediate pressure point. Energy Minister Michalis Damianos welcomed Meridiam’s entry, but said final decisions depend on European Investment Bank due diligence. That remains a request for a study, not an approved loan. No cabinet or regulator decision has been published on who pays which share.

Cypriot reporting says the government will pay €125 million during construction, triggered by the issuing of a NAVTEX, a maritime notice allowing survey work at sea. Two instalments are already being treated as outstanding. The NAVTEX has not been published.

Reports point to possible issuance in October, with unfinished surveys passing through waters where Turkey has signalled objections. Greek Foreign Minister George Gerapetritis said Greece would not seek Turkey’s permission. That states Athens’s position clearly. It does not remove the operational risk of sending survey vessels into contested seabed.

Who gains, who carries the cost

Regulated assets are attractive because approved costs are repaid over time by future users, not only by shareholders. Meridiam gains control of that kind of asset, supported by about €657 million in EU grant funding (CINEA, Euronews). ADMIE reduces its financing exposure while keeping engineering fees and the operator role. If the cable works, Cyprus ends its isolation from the continental European electricity grid and gains access to cheaper imports and stronger supply security.

The cost risk sits mainly with Cypriot consumers and taxpayers. Cost recovery means regulators allow the project company to earn back approved spending through electricity charges before the cable supplies a single electron. That is normal infrastructure finance. For a project routed through contested waters, with an estimated cost above €1.9 billion (Euronews), the problem is that the full contractual terms covering overruns, security delays and refinancing remain unpublished.

The ownership change is real. RAAEY’s consultation closes on 11 September. Cyprus’s tariff decision and the EIB process will show whether Meridiam’s capital can draw in enough institutional backing to move the cable from a shareholder agreement into the Mediterranean.