French energy giant Electricite de France (EDF) expressed last week its interest in the privatization of Greece’s Public Power Corporation (PPC), just as the government is poised to sell off part of the electricity company under a scheme dubbed “Small PPC.”
A meeting between the EDF’s chairman and chief executive, Henri Proglio, with Prime Minister Antonis Samaras in Athens and an expression of interest in PPC by Europe’s biggest electricity firm has stirred the waters in the local market, which had anticipated EDF to approach the buy indirectly via its Italian subsidiary Edison. Edison is already active in Greece through the two power plants of Elpedison (its consortium with Hellenic Petroleum).
It now appears that the French wished to make it clear that they take a strategic view of the Greek market, surprising even the Greek government: “[Proglio] arrived and presented a study on the synergies that an EDF entry into the Greek market would offer, and was well-informed about the situation of PPC’s finances and the detailed privatization plan,” a government official close to the talks told Kathimerini.
The study drawn by EDF focuses primarily on the entry of the French company into PPC as a strategic investor and secondarily on its participation on the tender for the company to created from splitting 30 percent of PPC’s production capacity, known as “Small PPC.”
EDF estimates that PPC will remain a strong player in the domestic market even after giving away 30 percent of its capacity. It also estimates that EDF and PPC have much in common, both in terms of philosophy and structure. It is not concerned by the large stake held by the state as EDF is also state controlled and therefore may be the only company in Europe that is not afraid of the role of unions in PPC.
The question is what the response of European competition authorities will be to an EDF arrival given its local presence through Edison, but EDF has already examined a plan to buy out Hellenic Petroleum’s stake in Elpedison and merge it with PPC.