The sale of 49% of the Hellenic Electricity Distribution Network Operator (DEDDIE) and the share capital increase that Public Power Corporation announced suddenly last Thursday give PPC the financial strength to secure its position as a strong pillar in the post-lignite era of the local energy market.
The utility’s decision is expected to be the catalyst for activity at the business level toward mergers and acquisition in the industry, with the weakest players joining the strongest. This cycle will likely close with the supremacy of three or four utilities, with PPC now being certain to constitute one of them, market insiders stress.
The decision that will reduce the state’s stake to 34% opens a new page in PPC’s history as a listed company, in an ever-more competitive market. Armed by the high cash reserves from the capital increase and the concession of 49% of DEDDIE, along with its emancipation from the state that held it back with a problematic growth model, the country’s biggest industry is shifting from defense to offense as it forms the future agenda in the energy market, accelerating the energy transition. It will now have the money to finance its transformation.
The plan behind the capital increase is for PPC to double its market share in renewable energy sources to reach up to 40% (hydroelectrics included) up to 2026, as well as penetrating the Bulgarian, Romanian and Serbian market as a producer.
The local market acknowledges the advantage of this latest PPC move and its momentum for the sector, especially in the current period with the pressure from the increased need for working capital amid the power rate hikes. This crisis is seen likely to change the energy map internationally, with Greece being no exception.
“This is a game of survival, and only the strongest will survive,” says a representative of one of Greece’s major energy groups, pointing also to developments in Great Britain where larger players are taking over the client lists of troubled small suppliers.