Cabinet decides the separation of the Electricity Authority of Cyprus
The proposition outlines that the organization will be legally unbundled into two distinct organisations; a distribution monopoly responsible for distribution and transmission, and a power-producing entity responsible for production and supply, competing in the liberalised electricity market.
This separation of the EAC is in an effort by the government to satisfy one of Troika's preconditions for the successful completion of the evaluation programme and is a step towards unlocking the final tranche of funding from Troika.
According to a government source, the troika agreed to the withdrawal of the EAC's privatisation decree and the inclusion of government reservations relating to uncertain factors such as a potential solution to the Cyprus problem, natural gas developments and the EuroAsia Interconnector project, designed to connect the grids of Israel, Cyprus and mainland Europe via a subsea cable.
EAC'S Customer Service will be closed to the public
Unions will also be holding a general meeting at the EAC's Strovolos offices on Monday, bringing employees from across the island. As a result, the customer service will be closed to the public.
An announcement by the EAC apologised for any inconveniences and sought to clarify supply would not be affected.
Efficient and Effective splitting up
The memorandum of understanding with the international lenders calls for the "efficient and effective" splitting up of the state power company.
It is a 'prior action' for the release of the next tranche of Cyprus' bailout programme and was initially regarded as one of a handful of privatisations that, too, have not materialised, including the telecom company CyTA, the Ports Authority and divestment of other assets.
The aim was to help the government raise some €1.4bn from privatisations and reduction of the workforce from the state payroll.