The plan for the creation of a smaller rival to the Public Private Corporation through the sale of production capacity to private investors, expected to be submitted in Parliament soon in the form of a draft law, has received some positive feedback from the market after parts of it were leaked to the media.
Market officials say the fuel mix offered in the portfolio of the so-called “Small PPC” is satisfactory although the plants to be conceded require high investment for their sustainability and competitiveness to be retained – a parameter the state will need to take into account regarding the anticipated revenues.
The industry speaks of a “fair price” whose level will depend on the so-called “gray areas,” – e.g. the trading sector and PPC’s borrowing – and is awaiting the final text of the draft law, which according to sources from the Environment and Energy Ministry will be put up for public consultation on Monday.
There are some reservations however over whether Parliament will clear the bill, given the sensitivity of the issue and the upcoming local and European elections, as well as over the degree of interest it will be able to generate in the private sector.
Investment interest is expected to come from existing players in the electricity production market. These are the groups of Hellenic Petroleum, Mytilineos, Motor Oil, GEK Terna and Elliniki Technodomiki, which are likely to look abroad for bidding partners. Among the international companies likely to participate in offers for the Small PPC, the favorites are those that are already involved in local electricity production, such as Italy’s Edison, which is a partner of Hellenic Petroleum, Gaz de France Suez, which is a GEK Terna partner, as well as Qatar Petroleum International, which is now a partner of GEK Terna at the Heron II plant.
The market remains confused as to how a share of the existing PPC consumers will be passed on to the new power company to be privatized, as this is a key point in the process of creating competition for the country’s electricity giant. This issue, observers say, will be key in terms of attracting investors and determining the price to be paid.
On the production plants to be privatized, market insiders say that two, both at Amyntaio in northwestern Greece, will have to be withdrawn in 2020 unless the necessary investment for their modernization is forthcoming, while other plants face a variety of problems. Furthermore, out of the three mines to be included in the Small PPC’s portfolio, for the time being two of them will only have their rights conceded without offering any electrical output, given that the Komnini mine has not yet opened because a whole village needs to be transferred elsewhere first, and the Kleidi mine has remained closed for the last five years due to a landslide.
The hydroelectric portfolio is seen as particularly attractive. The Nestos complex in eastern Macedonia, including the plants at Platanovrysi and Thisavros, with an option for a third at Temenos, constitutes a great asset, while the two plants at Pournari are also seen as reliable.
Another strong point of the portfolio on offer will be the natural gas-powered plant at Komotini, although investors would have preferred the new production plant at Aliveri, which is closer to the main consumption center of Attica and has a greater output.