A Turkish-Cypriot man stands on the roof of a house and looks toward the Greek side of Cyprus in the divided capital of Nicosia in this file photograph.

NICOSIA (AFP) – A reunited Cyprus would cost 9 billion euros, with international donors having to plug a 1-billion-euro ($1.3 billion) shortfall to fund a settlement, according to a study released yesterday.

In the independent report, published by the local branch of the International Peace Research Institute of Oslo, Norway, three Cyprus-based economists focus on the investment needed to implement any peace deal.

“If you look at it rationally, there are ways of financing a solution without the country going bust,” said Fiona Mullen, co-author of “Reconstructing a Reunited Cyprus.”

“Cyprus has lots of sources of finance. It’s in the eurozone and has a stable economy. Even in the current global environment, there are plenty of sources to finance a solution,” she added.

The report calculates that Cyprus could also receive an additional 600 million euros in nonrefundable grants from Brussels if redefined as two statistical regions. This amount is not included in the estimated total borrowing requirement of 9 billion euros.

Public and private investment is put at around 7.2 billion euros for new housing, renovation and infrastructure projects in moves to unify the road, electricity and communication networks.

The report includes a rough estimate on property compensation based on paying back interest on bonds, although much will depend on any final settlement.

Greek-Cypriot President Dimitris Christofias of the internationally recognized Republic of Cyprus, and Turkish-Cypriot leader Mehmet Ali Talat, leader of the Turkish-occupied north of the island, launched peace negotiations in September last year and are currently tackling the highly complex property issue.

Most of the refinancing would come from Greek, Turkish and Cyprus banks as well as the European Investment Bank, but the shortfall would depend on the “willingness of the international community,” the report says.

It says a solution would launch a construction boom and give fresh impetus to every sector of the economy.

“The impact of a settlement on tourism, transport, higher education, financial and business services will raise real GDP growth by three percentage points in the first five years, creating more than 33,000 jobs,” it predicts.

An earlier study last year by the same authors calculated that Cyprus would yield a peace dividend of at least 1.8 billion euros a year in new business opportunities with Turkey.

And each Cypriot family stood to earn an extra 5,500 euros a year from reunification.

Hopes of ending the 35-year division have gathered pace since the launch of fresh negotiations last September.