Major international interest in PPC privatization process

A number of strong companies in Western Europe, Russia, China and Qatar are awaiting the implementation of the plan announced by the Greek government last week concerning the privatization of Public Power Corporation (PPC).

Two Chinese companies and an Italian firm expressed interest in the part of the electricity network to be privatized in preliminary contacts made during the preparation of the plan, which are expected to resume now that it has been announced.

TERNA, the Italian electricity transmission system operator, is interested in the broader Balkan region and has already announced the realization of a major investment in the 1,000-megawatt electric energy

interconnection between Italy and Montenegro. The Italian operator is already working in cooperation with ADMIE, the Greek Independent Power Transmission Operator, on the underwater connection of the Greek and Italian networks.

China is expected to take part in the tender for 49 percent of the PPC network that will be put up for sale either through State Grid Corporation of China (SGCC), the Asian country’s biggest network company, or Portuguese firm EDP, which has been acquired by China’s Three Gorges (CTGPC).

The energy market expects the privatization of the transmission network to have an immediate growth impact as it will secure the necessary funds for the development and expansion of the projects that are currently inactive due to the inability to secure any funding.

On the other hand the market is concerned about the growth impact of the sale of 30 percent of PPC’s production capacity, which will form the so-called “small PPC.” Both the energy market and the Environment and Energy Ministry believe that the impact that the sell-off will have on growth will depend on the commitment of the buyer for new investment, which would require considerable funds.

There has already been some preliminary interest noted in the “small PPC” by major Western European companies, including German giants RWE and EON, whose decision will depend on their likely shift in strategy toward reducing investment in nuclear energy after Berlin’s decision to shut down nuclear plants.

There is also interest from Electricite de France (EdF), either directly or through its Italian subsidiary Edison, while the ministry has been informed of interest from Russia through Gazprom and from Qatar too. Gazprom’s interest, however, will depend on the outcome of the tender for the Public Gas Corporation (DEPA).