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Cyprus FSRU



Project number:


Business sector:


Notice type:


Approval date:

24 Jun 2020



PSD disclosed:

09 Aug 2019

Project Description

Provision of a loan of up to EUR 80 million for the acquisition and construction of a Liquefied Natural Gas (LNG) Floating Storage and Regasification Unit (FSRU) and its related infrastructure in Vasilikos Bay, Republic of Cyprus.


Project Objectives

The Project will be a landmark for Cyprus by introducing natural gas to the country for the first time, thereby reducing the country's dependence on imported oil and petroleum products, and enabling the switch to cleaner fuels. The Project will significantly reduce emmissions of CO2 and other pollutants, reduce Cyprus' energy costs, increase energy security and promote regional interconnections.

Transition Impact

ETI score: 67

The Project is expected to contribute to the Resilient and Green transition impact qualities. The investment will introduce natural gas to Cyprus for the first time, and thereby reduce the country's high dependence on oil and petroleum products. The Project is in line with the Green Economy Transition approach and will contribute to the decarbonisation of Cyprus' electricity sector by switching electricity generation from fuel oil to natural gas, resulting in CO2 emission reductions.

Client Information


ETYFA is a special purpose vehicle owned by Natural Gas Public Company of Cyprus (DEFA) and the Electricity Authority of Cyprus (EAC).

EBRD Finance Summary

EUR 80,000,000.00

Total Project Cost

EUR 354,100,000.00

Environmental and Social Summary

Categorized B (2014 ESP). The acquisition/construction of a floating storage and regasification unit (FSRU) and the development of related infrastructure in Vasilikos Bay, Cyprus (the Project) is categorised as Category 'B' as per EBRD's Environmental and Social Policy.  This determination of categorization also considered the provisions of the EU EIA Directive, Cypriot EIA legislation combined with the outcome of the EIA, the Project's potential environmental and social risks and the site location within an industrial area.

Environmental and social due diligence ("ESDD") has been conducted by an external consultant and included review of categorisation of the Project; review of the local EIA and the corporate systems in place prepared for the Project against the applicable Performance Requirements (PRs); identification of the key Environmental and Social (E&S) issues and risks of the Project;  and identification of actions required to bring the Project in line with the EBRD's Performance Requirements ("PRs").  The ESDD also included the development of a Non-Technical Summary (NTS) and a stakeholder engagement plan (SEP) to guide future stakeholder engagement and information disclosure activities.

The main risks associated with the Project are related to impacts to marine biodiversity, safety of the facility and emergency response planning and possible impacts to existing fishing activities in the area.  The main impacts on biodiversity are related to marine flora and fauna disturbed by construction works (sediment suspension and water turbidity) and the navigation and mooring of vessels at the operational stage. A Marine Environmental Baseline Study was prepared for the Project and a Biodiversity Management and Monitoring Plan including provisions for Marine Mammals and Turtles will be prepared for the Project as per the Environmental Terms issued by the Ministry of Environment.

As with any project requiring construction and operation, potential impacts on the health and safety of the workers could be, due to the increased risk of accidents during construction works, as well as operation of the facility. The EIA proposes several mitigation measures for this issue. Trainings will be provided to the workers and a Health and Safety Management Plan will be developed for the Project by the Contractor. In addition, health services will be provided to the employees at the construction sites and a Grievance Mechanism will be established for the workers. Road safety signs and protective equipment will also be provided and a Traffic Management Plan for the construction phase of the Project will be prepared to ensure Community Health and Safety.

The location of the FSRU is ensuring adequate distance from the shore with regard to protection of community health and safety. The onshore facilities will be fenced and the access will be restricted. It is planned that the FSRU and the equipment used will have safety systems in place to identify and prevent safety risks (emergency shutdown, leakage limitation, fire protection, flood control and crew escape as well as any other security system and equipment required by the competent authorities and good industry practice). A safety zone will also be defied around the FSRU in collaboration with the port authorities and the Vasilikos Bay management authority to minimise collision risk and occupational and community health and safety risks (e.g. fishermen). A series of risk assessment studies in accordance with Seveso III Directive have been prepared for the Project. All the scenarios that may potentially have an impact on community health and safety have been assessed. A Risk Assessment Analysis has been prepared for the Project where the hazards and the likelihood of accidents are investigated and their impact on the public safety. The Project design has taken into consideration the seismicity of the region and the potential risks resulting from damage of the pipeline and FSRU because of earthquakes. Other Natural Hazards like extreme waves, winds and temperatures have also been taken into consideration. The client will review and monitor its contractors to ensure that proper actions are taken for the protection of the community in terms of environment and health and safety.

The nearshore and offshore area is used by local fishermen although fishing is already prohibited according to Master Plan of the area. The offshore area is already disturbed due to several industrial activities taking place and it is expected that the access restriction, loss of fishing fields and temporary impacts caused by the FSRU operation might impact further the limited fishing activities which are ongoing in spite of the prohibition. Potential impacts associated with this will be further assessed and addressed in accordance with PR5 prior to the start of the construction. The client will identify the extent of the fishing activities in the area and consider further consultation with stakeholders involved in fishing activities within the SEP.

Even though the direct CO2 emissions of the Project are estimated to be between 15-20 ktCO2 eq per year, the Project will contribute to the reduction of CO2 emissions in power generation on a national level of more than 25 ktCO2eq annually post-investment by substituting the current use of heavy fuel and diesel oil, which are currently the main fuels used in Cyprus for energy generation and produce higher CO2 emissions. Additionally, the switch to natural gas will contribute significantly to reduction of SO2 and particulate matters in the area around Vasilikos Power Station.

An Environmental and Social Action Plan ("ESAP") has been prepared and will be agreed with the client in order to ensure the Contractor / ETYFA implements the project as planned and that the Project is developed in line with the PRs.  This PSD will be updated to reflect the main action points once agreed.

With implementation of the ESAP and the ESMPs this project is structured to be compliant with the EBRD Performance Requirements. The ESD will monitor construction to verify this compliance.

Company Contact Information
+357 22 761 761
+357 22 761 771
13 Limassol Avenue Demetra Tower 4th Floor 2112 Nicosia Cyprus P.O. Box 24954, 1305 Nicosia – Cyprus

PSD last updated

24 Jul 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email to get guidance and more information on IPAM and how to submit a request.


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