The European Investment Bank (EIB) is closely monitoring developments over the Vasiliko liquified natural gas (LNG) terminal, which is currently under investigation for misappropriation of EU funds and corruption.
EIB Vice President Kyriacos Kakouris on Friday was asked if they would request the funding paid out for the project so far.
He clarified the EIB was monitoring the matter as it was evolving.
“It is sad because a project of such importance for the economy of Cyprus and our energy efficiency has reached this point. We are monitoring it on a daily basis I would say, if not weekly basis.”
The EIB’s officials are in contact with both officials of the finance ministry and the project contractor Cyprus’ Natural Gas Infrastructure Company (Etyfa), he added.
So far, the EIB has not made a decision over the funding, Kakouris specified.
“The EIB is committed to the projects it finances and as long as the purpose remains, the EIB is there to support them.”
In July, the European Public Prosecutor’s Office (EPPO) said it opened an investigation into Cyprus’ contentious Vasiliko LNG import terminal on suspicion of procurement fraud, misappropriation of EU funds and corruption.
In a statement, EPPO said the investigation was prompted by an audit office report on the matter in January “regarding possible violations during the procurement procedure and the subsequent execution of the public contract for the LNG project.”
The government said it was aware of the investigation since March.
Shortly before the announcement of the investigation, Chinese-led construction firm CPP-Metron Consortium Ltd (CMC) announced it was terminating the agreement over the Vasiliko LNG terminal.
In a statement, the firm slammed Etyfa accusing it of bullying and for leaving CMC to work “without proper or timely payments” for years.
President Nikos Christodoulides said CMC should never have been awarded the project.
The Vasiliko LNG project aims to create an entry point for natural gas to Cyprus, enabling the country to connect with the wider European gas market, and involves a cost of €542 million – of which approximately €101m was financed by the Connecting Europe Facility programme.
The construction, which should have been concluded in December 2019, has not yet been completed.
In its 136-page report on the Vasiliko LNG, the audit office said the management of the whole project has been “tragic”.
It identified irregularities over invoices which were approved as well as approvals for subcontractors by Etyfa.
