A new subsea electricity interconnection linking the island of Crete to mainland Greece will receive more than €250 million from the European Regional Development Fund (ERDF).

The electricity interconnection includes two subsea 500 kV DC cables, 335 km in length, laid at depths of up to 1,200 meters on the seabed.

The underground section of the project has been completed and work now focuses on the construction of two converter stations: one at the Damasta substation in Crete and another in Koumoundouros, Attica. The new power link is expected to be fully built by the end of this year, with full commercial operations scheduled to start next year. Upon completion of the project, the two cables will have 1 GW of total transmission capacity.

The ERDF’s €250 million financing builds on previous European and domestic funds for the project, which requires a total investment of approximately €1 billion.

The investment is expected to pay off, though. Commissioner for Cohesion and Reforms Elisa Ferreira said when announcing the new ERDF funds that “thanks to this Cohesion Policy support, the new connection will lower the tariffs that Greek electricity consumers are currently paying to cover high generation costs on islands that are not part of the main grid. In times of high energy prices, this investment and the creation of an electricity connection to mainland Greece will bring good news for the citizens of Crete.”

Greece’s Independent Power Transmission Operator (IPTO), which is the owner of the Crete-mainland Greece interconnection, has separately said that “when both electrical interconnections of Crete will be in operation, the country’s consumers will collectively save €550 million through their Public Utilities bills every year, an amount expected to gradually grow to €1 billion by 2030.”

The project will also have a significant environmental footprint. The European Union said in a press release that the electricity connection is projected to cut CO2 emissions by more than 400,000 tons in its first year of operation in 2025. Such environmental benefits will come from phasing out old fossil fuel units in Crete and opening up grid space for about 2.5 GW of new renewable energy capacity.

The Crete-mainland Greece link also matters for countries outside Greece and the European Union. The endpoint of the interconnection in Crete is expected to be the starting point for a new submarine line connecting Crete to Cyprus and eventually Israel. This is the so-called EuroAsia Interconnection, which is already under development. There are also additional plans to link Crete to Egypt via a separate electricity line.