ECONOMY

PPC sets Halyvourgiki deal, no decision regarding RWE

The Public Power Corporation (PPC) said yesterday its board had approved an energy cooperation deal with steel producer Halyvourgiki to boost capacity, but did not discuss a proposed deal with Germany’s RWE. PPC has been seeking partners to help it expand and modernize operations in Greece and the Balkans to offset a drop in market share and profits since the country liberalized its energy market last year under EU guidelines. «PPC’s board approved a memorandum of understanding (MOU) with Halyvourgiki for… joint construction and operation of two natural-gas-fired plants with a total 880 megawatts capacity,» PPC said in a bourse filing. The MOU sees the creation of a separate company, with Halyvourgiki holding 51 percent and PPC 49 percent. PPC has also entered into talks with RWE as part of its modernization plans, but has yet to clinch a deal due to union opposition which has halted board meetings that were to sign off on final agreements with the German company and Halyvourgiki. Seeking to avoid another postponement, yesterday’s board meeting was held at a central Athens hotel instead of at the company’s headquarters. PPC workers still blockaded the entrance to the hotel and handcuffed themselves together in protest at any deal with RWE, which they say is a prelude to a further privatization of the company. «We are against PPC’s policies to cooperate with Haly-vourgiki by giving them a majority stake in the new company,» said Rizos Rizos, secretary of PPC’s main workers union. «PPC can’t blatantly sign deals with private companies.» PPC has also been in confidential talks on a cooperation memorandum with RWE, focusing on the possible construction of coal-powered electricity plants with total capacity of 1,600 MW and development of renewable energy sources. The proposed agreement sees electricity production being made greener by reducing the amount of lignite PPC uses in power its plants. Unions also oppose the idea because lignite use allows PPC to keep electricity prices for consumers the lowest in the EU, and because they say it would lead to job cuts. PPC, which has struggled to cope with high oil costs and outdated plants, has said it will spend about -2 billion to build renewable energy plants by 2014. (Reuters)