Minister of Energy and Water, Dr. Uzi Landau, instructed the Israel Electric Company (IEC) Sunday to press ahead with the laying of an underwater cable to Cyprus. The IEC is to prepare a memorandum of understanding (MOU) that it will sign along with DEH Quantum Energy, a firm controlled by the Electric Company of Greece, the Cyprus Bank and another private firm.

The IEC and DEH are expected to sign the MOU in a few weeks’ time. This will lead to a feasibility study, which will be followed – if all goes well – by ratification of the project by the Israeli and Cypriot governments, in the course of 2012.

The cable will be 270 km. long and provide an energy connection between Israel and Cyprus, 2,000 meters below sea level. Electricity will be able to flow in both directions at a capacity of up to 2,000 megawatts. Another cable will connect Cyprus and Crete, which is part of the Greek electricity grid. Therefore, Israel will effectively be connected to the European electricity grid.

An MOU for the longer cable has already been signed between Greece and Cyprus.

The entire project, including the Cyprus-Crete cable, is estimated to cost 1.5 million euro, one third of which is the cost of the Israel-Cyprus cable. The investment is expected to be recovered in full in four years’ time.

Minister Landau began advancing the project last November, when he visited Cyprus alongside President Shimon Peres. He discussed the matter with Cyprus’s Minister of Trade, Industry and Tourism, Praxoula Antoniadou, who stopped over for a brief visit in Israel last week and held further talks with Landau on the subject.