AGP Executive Report

Export Push: Cyprus’ Energy Ministry opened a €1.7m de minimis fund to help industrial and agricultural producers (and related services) secure a national pavilion at major 2027 trade fairs, starting with Fruit Logistica and ProWein, then Gulfood and Anuga. Shipping & Logistics: JPB Cyprus Holding agreed to acquire 100% of Genesis Logistics, pending competition clearance, while Cyprus renewed efforts to attract shipowners by highlighting tax stability, EU status and inspection performance as the registry grows. Finance & Fintech: Revolut appointed Georgios Vasiliou to lead its CySEC-authorised Cyprus crypto arm, and Eurobank was named top in Cyprus for individuals and business clients by Euromoney. Banking Operations: Housing Finance Bank named Robert M. Kusiima Mugabe as COO as it drives digital transformation. Consumer Rights: EU “right to repair” rules now apply in Cyprus, pushing manufacturers to offer timely, reasonably priced repairs for repairable products. Agriculture Strategy: The €109.3m plan to transform Cyprus’ primary sector is progressing through 2029, targeting higher GDP contribution and new jobs. Safety & Regulation: A jet ski collision in Famagusta is under investigation, with focus on licensing rules for under-18 operators. Business Climate: Cyprus saw EU’s second-steepest drop in bankruptcy declarations in Q2 2026, down 41.7% quarter-on-quarter.

Agriculture Strategy: Cyprus is pushing ahead with a €109.3m “Strategy for the Development of the Primary Sector” through 2029, aiming to lift the sector’s GDP contribution (currently 1.8%) and backed by a study projecting €138.6m output, €70.8m GDP impact and about 1,370 new jobs. Banking Spotlight: With banks’ profits strong since 2022, Cyprus now faces renewed political pressure as Parliament returns in September, with talk of a possible windfall tax and tougher banking-law changes amid a more fragmented post-election landscape. Energy & Infrastructure: The Great Sea Interconnector debate continues as experts question viability, governance and cost assumptions after Meridiam’s stake move, while Cyprus-Israel power-link filings and support from lawmakers keep momentum. Digital Connectivity: Cyta and partners are advancing the Ugarit 2 undersea cable to connect Cyprus and Syria by early 2028, replacing the older, lower-capacity link. Security & Defence: Cyprus is reportedly exploring becoming the first foreign operator of Israel’s Merkava tanks after rejecting Leopard 1A5s, potentially reshaping the Eastern Mediterranean armored balance. Regional Geopolitics: The “Mecca pact” is being framed as an “Islamic NATO” style collective defence step, with implications reaching toward the Eastern Mediterranean. Local Economy & Jobs: Cyprus’ utility battery has entered commercial operation, adding another industrial capability as the island looks to scale energy and tech services.

Cyprus–Syria Connectivity: Cyta, UNIFI and Syria’s telecom operator are pushing the new Ugarit 2 undersea cable, linking Pentaskhinos (Cyprus) to Tartus (Syria) and aiming for service by early 2028, replacing the older 1995 line with far higher capacity. Energy Infrastructure: The Great Sea Interconnector faces fresh scrutiny after an expert questioned viability, governance and cost assumptions following Meridiam’s 66% stake and pending feasibility work. Property & Housing Signals: Cyprus’ Q2 GDP growth hit 3.3%, but the property market cooled sharply in Q2, with new-build apartment/house sales down 42.2% by volume and 46.6% by value, suggesting demand shifted toward lower and mid-price homes. Marine Environment: Cyprus is also tackling invasive lionfish as Mediterranean ecosystems rapidly change, with local efforts turning the species into food while monitoring spread. Regional Trade & Ports: KPA tightened security at the Port of Mombasa under the ISPS Code, stepping up drills and training as maritime threats evolve. Tourism Pressure: Reports say hotel prices on Turkey’s coast are easing amid Iran-war driven demand shifts, with Cyprus also seeing price declines. Regional Security: A new Saudi–Türkiye–Pakistan defence agreement was signed in Mecca, raising questions about how deterrence and alliances may reshape the Eastern Mediterranean.

Energy & Infrastructure: Cyprus-Israel power link projects move into the “money stage,” with new investment filings and proposals from grid operators pushing the interconnector forward. Housing & Construction: Cyprus’ property market shows a demand shift rather than a full freeze, with new-build sales down sharply in Q2 but more activity clustering under €300,000 and stronger pockets like Nicosia. Economy: Cyprus GDP growth accelerates to 3.3% in Q2, outpacing the euro area and EU averages. Environment & Marine Industry: Cyprus steps up invasive lionfish harvesting as Mediterranean ecosystems rapidly change, while local pressure grows over sewage discharges affecting coastal water quality. Regional Trade & Shipping: Iran and Oman report progress on a Strait of Hormuz shipping traffic map, aiming to manage one of the world’s key energy routes. Tourism & Consumer Impact: Turkey’s coastal hotel prices fall amid weaker demand linked to the Iran war, with Cyprus also seeing price declines. Skills & Jobs: AI data center expansion is expected to create six-figure roles, intensifying competition for construction labour that also affects housing timelines.

Cyprus Economy Watch: Cyprus’ GDP grew 3.3% year-on-year in Q2 2026, outpacing the eurozone and EU, with growth driven by wholesale/retail, vehicle repairs, ICT, finance/insurance and construction. Energy Reliability: The grid operator says no power cuts are expected as demand eases and capacity remains sufficient, after July’s supply stress tied to high demand and unit failures. Property Market Shift: New-home sales in Cyprus fell sharply in Q2, with new-build apartment/house transactions down 42.2% and value down 46.6%, though demand appears to have shifted toward lower- and mid-priced homes. Marine Environment Pressure: Residents in Limassol and Moni report worsening seawater pollution, with Moni sewage overflow into the sea sparking community action and renewed concern over treatment capacity. Regional Power Projects: Cyprus’ electricity links and interconnector planning continue to move forward amid broader Greece–Cyprus–Israel cooperation and regional security debate. Security & Shipping Risks: Ukraine’s intelligence lists 26 Russian-linked vessels moving oil, LNG and stolen grain, noting 18 are not currently sanctioned by partner countries.

Cyprus Energy & Infrastructure: IPTO submitted the investment approval request for the Great Sea Interconnector, the Cyprus–Israel power link, after cost-benefit and cost-allocation steps—pushing the project into the regulatory evaluation phase. Cyprus Economy: Cystat prelim data shows Cyprus GDP up 3.3% year-on-year in Q2, with growth led by wholesale/retail, vehicle repairs, ICT, finance/insurance and construction. Energy Security: Cyprus’ energy minister says natural gas could reach European consumers by the first half of 2028 (around March), as the EU seeks new supply sources. AI for Tourism: Cyprus unveiled its “Smart Tourism 2032” AI strategy, aiming to embed AI across tourism services with a focus on small and medium businesses. Local Development: Paralimni secured planning permission for a central-area redevelopment—new pavements, trees and parking to boost commercial activity. Power Reliability: The grid operator says no power cuts are expected as demand eases, with reserves currently covering load. Fuel Prices Scrutiny: Consumers association questions whether Middle East-driven energy costs fully explain recent fuel price rises. Regional Politics: Turkey’s FM accuses Greece, Cyprus and Israel of forming a security alliance aimed at containing Ankara, amid expanding trilateral cooperation. Shipping & Trade: Eastern Mediterranean shipping leaders call for stronger RISQ 3.2 readiness as regional logistics face operational and compliance pressure. Environment & Land Use: Questions remain over an order not to mine the Kyrenia coast before the 1974 invasion, while a proposed Junius solar project faces an environmental impact statement requirement.

Smart Tourism Push: Cyprus unveiled “Smart Tourism 2032,” an AI strategy built around smart infrastructure, destination design and an “empowered digital tourist,” with special focus on small and medium tourism businesses. AI Skills Gap: A separate look at Cyprus’ AI and fintech ambitions flags a workforce challenge: strong graduate numbers, but STEM enrolment (14.9%) lags the EU, while demand is expected to skew heavily toward STEM roles. Energy Grid Milestone: The Great Sea Interconnector’s Cyprus-Israel section moved into the “money stage” as regulators received an investment request to set how cross-border costs are allocated. EU Circularity Rules: New EU vehicle rules entered into force, tightening used-car export controls and pushing recycled-plastic targets, with major provisions starting from 1 Sept 2028. Fuel Price Scrutiny: Cyprus’ consumers association is questioning whether Middle East-driven energy costs fully explain recent fuel price rises. Wildfire Risk: Forestry Department urged strict fire safety ahead of Aug. 15; a blaze near Marathounta in Paphos destroyed six hectares including almond trees. Used-Car Recycling Impact: EU recycling rules are set to hit Cyprus’ booming used-car market as compliance ramps up.

Energy Infrastructure: IPTO has submitted an investment request to Cyprus and Israel regulators for the Cyprus–Israel section of the Great Sea Interconnector, moving the project into the cost-allocation and tariff-recovery stage. Regional Power & Security: US lawmakers are urging the Trump administration to prioritise the Greece–Cyprus–Israel power link as part of a wider India–Middle East–Europe corridor. Utilities & Grid Resilience: Cyprus’ first utility battery project has entered commercial operation, adding grid flexibility. Shipping & Compliance: Eastern Mediterranean shipping leaders called for stronger operational readiness ahead of RightShip’s RISQ 3.2 inspection framework, stressing crew competence and consistent onboard procedures. Industrial Performance: Eurostat data shows Cyprus industrial output fell 1.3% in June 2026, with annual output down 0.9%. Environment & Governance: Environmental groups criticised the termination of Antonia Theodosiou as environment commissioner, warning of a loss of expertise. Consumer Watch: Cyprus consumers association questions whether fuel price rises are justified, citing sharp heating oil increases ahead of winter. Digital Agenda Cyprus Summit: Digital Agenda Cyprus Summit 2026 announced C. L. Max Nikias as a major speaker, focusing on AI’s impact on technology, work and geopolitics.

Energy Prices Under Scrutiny: Cyprus consumers association says heating oil and fuel rises since March look hard to justify, citing a jump from €0.950/l to €1.438/l for heating oil and calling on authorities to show the increases are properly monitored. Industry Pulse: Eurostat data shows Cyprus industrial output fell 1.3% in June 2026, reversing earlier year-on-year growth, while the euro area stayed broadly stable. Grid Upgrade for Renewables: Petrolina Electric brought a 5MWh utility battery into commercial operation at Pavlina Memorial Energy Park alongside 1.8MW solar, aiming to cut curtailment as midday renewable output outpaces storage and grid flexibility. Electricity Interconnector Momentum: The Great Sea Interconnector project advanced after Admie submitted an investment request for the Cyprus–Israel link under EU TEN-E rules, while US lawmakers urged Washington to prioritize the Greece–Cyprus–Israel power link as part of IMEC. Banking & Finance Watch: Central Bank of Cyprus extended the deadline for tenders to mint, package and deliver euro silver and gold collector coins to September 25, 2026. Energy Storage Pipeline: A wider 231MW/570MWh standalone storage pipeline is progressing through preliminary connection arrangements. Tourism Signals: Paphos hoteliers expect August occupancy at 85–90% but warn of weaker autumn bookings and falling room prices.

Energy Infrastructure Push: US lawmakers urge support for the Great Sea Interconnector, a planned undersea power link connecting Israel–Cyprus–Greece, framed as a strategic energy and connectivity bridge for the Eastern Mediterranean. Construction & Housing Momentum: Cyprus building permits surged in early 2026, with Oev and Keve pointing to strong housing demand but warning labour and red tape could slow delivery. Logistics Growth: Cyprus road freight activity rose in Q1 2026, with both domestic and cross-border movements increasing, reinforcing the island’s reliance on road links alongside shipping and air. Tourism Watch: Famagusta hoteliers expect August occupancy around 80–85%, driven by UK, Israel and parts of Central Europe, while last-minute booking patterns keep forecasting tricky. Regulatory Scrutiny: Questions are raised over whether a journalist’s crowdfunding for legal expenses fits Cyprus fundraising law, with authorities said to be reviewing the matter. Energy Storage Milestone: Cyprus’ first utility battery project is reported as going online, marking a new step for grid flexibility. Marine Ecology Risk: A Reuters report says the Mediterranean has surpassed 1,000 non-indigenous species, with Cyprus fisheries among those feeling the impact as invasions reshape ecosystems.

Cyprus Construction & Housing: Cyprus building permits jumped 10.7% in April to 639 permits worth €413m, with 1,728 residential units expected from the approvals, keeping the housing boom momentum. Energy Infrastructure: US lawmakers are pushing the Trump administration to prioritise the Great Sea Interconnector, linking the electricity grids of Greece, Cyprus and Israel as a key piece of the India-Middle East-Europe corridor. Tourism Pressure & Demand Shifts: Paphos hoteliers report August occupancy of 85–90% despite weaker room prices and softer autumn bookings, with last-minute decisions driven by higher living costs. Fintech & Jobs: Cyprus remains the top global hiring hub for online trading firms (226 vacancies as of mid-July), even as recruitment cools, with AI increasingly showing up in job descriptions. AI Retail Expansion: Powersoft365, a Cyprus-based tech firm, is taking eight live AI agents for apparel and retail to Indonesia’s Retail Summit & Expo in Jakarta. Animal Welfare Regulation Prep: A report on Cyprus pet hotels is due in early September, aiming to map licensed vs unlicensed dog boarding facilities before any regulatory changes. Fire Safety Upgrade: Cyprus’ forestry department completed training for 17 new fire engines, boosting readiness for wildfire response.

Energy Storage Breakthrough: Cyprus’ first commercial battery energy storage project is now in operation, with Petrolina Electric’s 5 MWh “Pavlina Memorial Energy Park” (paired with 1.8 MW solar) connected to the grid and designed to cut curtailment without subsidies. Natural Gas Timeline: Energy minister Michalis Damianou says the Republic could receive its first natural gas revenues in 2028, tied to Cronos field production, with Aphrodite developments expected in the second half of 2027. Telecom Infrastructure: UNIFI, Syrian Telecom and CYTA have signed the UGARIT 2 construction and maintenance deal for a 240 km repeaterless subsea cable between Cyprus (Pentaskhinos) and Syria (Tartous), targeting early 2028 service. Tourism Pressure: Larnaca hoteliers report a 15% drop in July hotel occupancy versus last year, with bookings still running below last year’s levels into early August amid Middle East instability. City-to-City Links: Larnaca is set to be twinned with Bahrain’s capital Manama, as both sides expand cooperation across defence, shipping, investment, tourism and technology. Shipping Compliance: Cyprus-based MSC Shipmanagement was fined $6m and put on probation after admitting it concealed a hazardous engine-control issue and obstructed a US investigation following the MSC Michigan VII runaway incident. Aviation Demand: Cyprus airports handled 1.63m passengers in July, with the year-on-year decline narrowing to about 1% as recovery continues.

Energy Storage Breakthrough: Cyprus’ first utility battery energy storage project, the 5 MWh “Pavlina Memorial Energy Park” by Petrolina Electric, entered commercial operation in July, aiming to cut solar curtailment and return up to 1.3–1.6 GWh/year to the grid. Subsea Connectivity: UNIFI Communications, Syrian Telecom (STE) and Cyta signed the UGARIT 2 construction and maintenance deal for a 240 km, repeaterless cable linking Pentaskhinos (Cyprus) to Tartous (Syria), targeting Ready for Service in early 2028. Gas Revenue Timeline: Energy minister Michalis Damianou says Cyprus could receive its first natural gas revenues in 2028, tied to the Cronos field’s planned production, with Aphrodite expected in the second half of 2027. Trade & Cost Pressure: CYSTAT data shows imports up 11.9% in June while exports fell 9.9%, widening the first-half trade deficit to €4.68bn. Aviation Momentum: Cyprus airports handled 1.63m passengers in July, with traffic only 1% down year-on-year as recovery continues. Environment & Fisheries: Scientists report invasive lionfish control efforts as warming seas and the Suez Canal accelerate new species entering the Mediterranean. Regional Defence Links: Cyprus renewed trilateral defence cooperation with Greece and Jordan, aiming to strengthen coordination amid security and energy pressures. Startup Visibility: A PR strategist says Cyprus’ innovation scene is growing fast, but founders need smarter ways to win global media attention.

Energy & Infrastructure: Cyprus says it can supply Europe with natural gas by first half of 2028, with the Cronos field feeding Egypt’s Zohr and Damietta LNG—positioning the island as an alternative source amid Ukraine and Middle East disruptions. Construction & Real Estate: Cystat reports 2,915 building permits in Jan–Apr 2026 (+35.1%), with residential permits and planned homes driving the surge. Electricity Grid: The TSO says demand is fully covered and now easing as temperatures fall, with PV helping keep the system stable. Trade & Shipping: Cyprus’ trade deficit widened to €4.68bn in H1 2026 as imports rose and exports fell, with transport-related vessel ownership transfers boosting the numbers. Regional Defence & Maritime Security: Cyprus, Greece and Jordan renew trilateral defence cooperation, while Cyprus and Bahrain look to deepen defence, shipping and investment ties. Agriculture: Carob growers demand a minimum 65 cents/kg or they’ll skip the harvest, citing rising costs and low yields. Environment & Local Development: Polis Chrysochous pushes a sustainable development model as the Environment Commissioner backs growth that protects nature. Business & Finance: Cyprus biotech iDNA Genomics reports a wider 2025 loss (€3.46m) and a weaker balance sheet.

Construction Boom in Cyprus: Cystat says Cyprus authorised 2,915 building permits in Jan–Apr 2026, up 35.1% year-on-year, with permits worth €1.67bn (+46.1%) and 1,728 dwelling units (+65% in homes). Biotech Under Pressure: Nicosia-based iDNA Genomics reported a wider 2025 loss of €3.46m and a sharp drop in total assets to €1.14m, with an AGM set for Sept 25 (electronic). Cyprus Natural Gas Push to Europe: Energy minister Michael Damianos says Cronos gas could reach European markets as early as March 2028, via a pipeline to Egypt’s Zohr and LNG processing at Damietta. Energy Deal Watch: MOL agreed to buy Shell’s BG Cyprus Ltd, taking a 35% stake in Block 12 offshore Cyprus (Aphrodite field), valued up to $720m. Shipping Carbon Costs in Focus: A new IMO framework debate could reshape carbon bills for Cyprus shipmanagement, with fears of overlapping charges alongside EU ETS and FuelEU Maritime. Aviation Summer Surge: Larnaca is handling about 50,000 passengers and 325 flights daily at peak, after road access to arrivals was reopened to ease congestion. Marine Insurance Partnership: Accredited Insurance (Europe) named Hellenic Hull as its first dedicated ocean marine MGA partner for Hull & Machinery, marine cargo and ancillary risks. Retail Signal from Cyprus: Jumbo’s Cyprus sales rose about 14% in July, lifting Jan–Jul performance to roughly +6% year-on-year. EU-Turkey Policy Monitoring: A Cypriot foreign ministry memo says Nicosia is tracking eight EU–Turkey cooperation dossiers closely, aiming to block progress if Cyprus interests are compromised.

Energy Security: Cyprus Energy Minister Michael Damianos says the Cronos natural gas field could start supplying Europe as early as March 2028, after TotalEnergies and Eni’s final go-ahead and a planned pipeline to Egypt’s Zohr and Damietta liquefaction. EU-Turkey Watch: A Cyprus Foreign Ministry internal memo says Nicosia is tracking eight EU-Turkey cooperation dossiers and is ready to move fast to protect its interests if EU policy advances without real progress on the Cyprus issue. Electricity Interconnector: Cyprus’ energy chief also welcomed French investor Meridiam’s backing for the Great Sea Interconnector, while warning red-tape and cost uncertainty could still hit consumers. Animal Health & Trade: The Philippines has banned imports of live animals and several animal products from Azerbaijan, Bahrain, Cyprus, Iraq, Israel, Kuwait and Palestine after FMD SAT1 outbreaks, with border quarantine and confiscations ordered. Justice & Public Safety: Cyprus Justice Minister Costas Fitiris pushes back on police union demands, arguing unions can’t dictate operational security policy, as prison capacity and legal reforms remain pressing.