The total estimated cost of the project is €53m and the construction of the facility is expected to hold at least one month of emergency oil reserve supplies.

The financing is claimed to be EIB’s first infrastructure scheme in Cyprus to be supported by the Investment Plan for Europe initiative.

Republic of Cyprus, Minister of Energy Giorgos Lakkotrypis said: “The European Investment Bank has been a key partner for energy investment in Cyprus for more than 40 years. New EIB support for emergency oil storage at Vasilikos confirmed today will ensure critical energy infrastructure in a modern and safe facility.

“The EIB’s unique technical experience and financial expertise gained from backing energy investment worldwide has strengthened the Vasilikos scheme.”

The loan provided by EIB is for a period of 20 years and will be used in the construction of a new six tank 200,000 cubic metres oil storage facility at Vasilikos on the southern coast of the island.

It will also cover firefighting, fencing, pipelines, security and roads at the new site.

The Vasilikos terminal will hold the bulk of oil reserves owned by the Cyprus Organisation for Storage and Management of Oil Stocks.

Expected to be operational in 2020, the new facility will allow for storing oil supplies for one month and will contribute towards compliance with a European obligation to store oil reserves equivalent to 90 days of energy needs.

European Investment Bank vice president Jonathan Taylor said: “Investment to ensure security of energy supply is crucial to avoid disruption and safety of strategic facilities. The European Investment Bank is pleased to work with Cypriot partners to transform critical energy storage at Vasilikos.

“This is an impressive project that demonstrates best practice and world class safety standards. The €35m long-term EIB financing represents our largest support for energy investment in Cyprus for more than 5 years and is the first infrastructure project in Cyprus backed by the Investment Plan for Europe.”