BUSINESS

Greece to launch tender for power grid operator end June

LEFTERIS PAPADIMAS

TAGS: Privatizations, Energy, Economy

Greece's main power utility will formally launch the sale of a stake in its power grid operator ADMIE in June, a step towards opening up its electricity market and complying with the terms of its international bailout.

PPC controls almost 95 percent of the Greek retail market and must reduce this to below 50 percent by 2020 under its third bailout.

Greece has also promised to sell up to 24 percent in ADMIE, a grid of more than 11,000 km of high-voltage power cables which is fully owned by PPC.

PPC's Chairman and Chief Executive Manolis Panagiotakis said on Wednesday the tender process is expected to start at the end of the month and conclude in October. He said however that it was important that it remained under state control.

"The launch of the tender will be approved by the general assembly (on June 30) and will be published a few days later," Panagiotakis told Reuters on the sidelines of a press briefing.

"We hope that it will be concluded by mid-October and that there will be interest from investors."

Earlier, he said that it was important that PPC received "just compensation."

Greece has tried to sell PPC before. Soon after winning parliamentary elections, Greece's leftist SYRIZA government froze the process, but later pledged that to keep the asset at least partly state-controlled.

Panagiotakis called conditions "adverse and unprecedented."

Owed about 2.5 billion euros ($2.8 billion) in unpaid bills after Greece's deep recession, the company has announced a 15 percent tariff cut for customers who pay consistently on time, a move which may crimp revenues.

Panagiotakis could not estimate the exact impact and said it could be "negligible."

However the company was optimistic that collection of overdue payments would improve overall and that state arrears would be settled after the disbursement of fresh bailout loans expected this month.

ADMIE planned to invest in Albania's electricity market, he said, and would also revise costs and take investment and business initiatives.

PPC reported a 10 percent rise in first-quarter core profit, helped by energy savings from declining oil prices and lower provisions for unpaid bills. It plunged into loss last year as it set aside hundreds of millions of euros to cover the unpaid bills.

[Reuters]

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