On the Greek island of Crete, investors have their eye on more than the sea and the sun. Energy, transport and infrastructure projects, worth seven billion euros, nearly four percent of the country's annual economic output, are on the agenda in projects set to lead the island into the next decade.
A major step forward amidst this new wave of investment activity is a ceremony to be held at Kastelli on Saturday, marking the construction of the new airport, in an event to be attended by Prime Minister Kyriakos Mitsotakis. Budgeted at 1.5 billion euros, the airport will be the country's second-largest and is scheduled for completion by 2025.
Other large projects earmarked for the island include a 200-kilometer highway in northern Crete costing 1.5 billion euros, the development of the current N.Kazantzakis airport, a one billion euro 328-kilometer undersea cable connecting Crete with the country's main power grid.
Additionally, there is a 1,000 MW wind park project to be built by the Copelouzos group and TERNA, and the 600 million euro Elounda Hills tourist resort.
The start will take place on Saturday when bulldozers commence clearing the way for the new airport, which will cater to nine million passengers per year, in what amounts to a largely symbolic gesture, signaling the coming of the new era.
Even though GEK TERNA and India's GMR airport took on the construction of the new airport in a deal signed in May 2017, the project moved ahead just a few days ago due to a 180 million funding deal signed with the European Investment Bank and the Greek state. This will land Greece with a 45.9 percent stake in the airport (that will have a construction cost of 480 million euros), while GEK TERNA will take a 33 percent stake and another 21 percent will go to GMR.
This will then open the path for the development of the island's cuρrent airport, located at Heraklio. After its shut down, the airport will be developed to accommodate tourism facilities and real estate investments, estimated to exceed the one billion euro mark. This comes as Greece's privatizations agency (HRADF) gets ready to launch this year a tender for the sale of a majority stake in the port at Heraklio, which is reportedly on the radar of large cruise ship operators, as developments of the former US military base at Gournes are also imminent.
This property, stretching over 34.5 hectares, has been earmarked for the construction of a new casino, along with a hotel and other facilities, including stores and mini-golf.
Infrastructure is one side of investment activity. Energy is the other. The Crete-Attica undersea cable is being moved ahead by the Independent Power Transmission Operator (IPTO), in a project that is set for completion by 2023, though many see this timeline as being exceptionally ambitious. Meanwhile, a second shorter undersea power link connecting Crete with the Peloponnese is expected to be completed in 2020, helping cover the island's energy needs in the winter months. When combined, the two undersea cables will provide Crete with a reliable source of electricity from the mainland for many decades.
In regards to green power, Copelouzos and Terna are continuing talks with IPTO over their 1,000 MW wind park in a bid to secure capacity on the undersea cable with Attica to transport the power it will generate. PPC has also recently joined these talks. The former state electricity monopoly also wants to secure the use of the undersea cable.
More on the energy front is expected from a planned Floating Storage Regasification Unit (FSRU), like the one in northern Greece's Alexandroupolis. Initially, gas transmission operator Desfa was looking at setting up the 175 million euro transportation, storage, and regasification unit in Atherinolakkos, on the island's south. But the proposal by Desfa that users will have to foot the bill is raising concerns for energy regulator RAE. More options are being looked into for the period leading up to 2023 when the undersea power cable is expected to be operating.