Israeli defence firms explore Cyprus operations linked to EU Safe programme

Nicosia, Cyprus. Israeli defence companies are interested in establishing operations in Cyprus to potentially benefit from the European Union’s Safe defence financing programme, President Isaac Herzog and President Nikos Christodoulides discussed during talks on Thursday.

The one-day working visit also covered defence cooperation, Cyprus’ plans for further military acquisitions from Israel, energy projects and a proposed double-taxation agreement.

Safe financing and defence procurement

Cyprus is eligible for up to €1.18 billion in financing through Safe, the EU’s security action for Europe programme, which supports defence investment by member states.

Cyprus submitted its investment plan last year. The European Investment Bank approved it in January, followed by EU approval of the loan agreement.

Israel is already among Cyprus’ largest suppliers of defence equipment. The two sides agreed to remain in contact regarding equipment Cyprus could acquire under its armament programme, including Merkava tanks, which are being discussed as an alternative to Greece’s ageing Leopard 1A5 units.

The Merkava, Hebrew for “Chariot”, is an Israeli battle tank designed with an emphasis on crew protection and resilience against drone attacks.

Cyprus has expanded its defence procurement in recent years, acquiring Barak MX air defence systems and radar platforms from Israel and planning to obtain advanced attack helicopters.

Energy and taxation discussions

Herzog and Christodoulides also discussed development of the Aphrodite gas field and progress on the Great Sea Interconnector project.

Israeli officials indicated that the agreement concerning the Aphrodite field was close to completion.

Christodoulides also raised the issue of a planned Cyprus-Israel agreement to avoid double taxation, which dates back to 2011.