ECONOMY

PPC board signs off on RWE Albania plant and gas deals

Electricity utility Public Power Corporation’s board yesterday signed off on a cooperation deal with Germany’s RWE AG under which they will jointly build a coal-fired power plant in Albania, PPC said. PPC has been seeking partnerships to help modernize its operations and expand in Southeast Europe to offset a drop in domestic market share since the country liberalized its energy sector last year under EU guidelines. PPC has been in negotiations with RWE for the past few months, originally planning to build plants in Greece, but the idea was dropped after continued protests by unions, who argued the deals would lead to a further privatization of the company. «The memorandum of cooperation foresees that if the project (to build a plant in Albania) is viable, a new joint venture company will be created,» PPC said in an Athens stock exchange filing. The two groups would jointly build a 500-800 MW coal-powered plant in Albania, with RWE holding 51 percent of the company, PPC 39 percent and Greek cement company Titan, already active in Albania, holding a 10 percent stake, it said. PPC had originally said it was discussing with RWE the possibility of building coal-fired electricity plants in Greece with total capacity of 1,600 MW. PPC and RWE will also explore the possibility of cooperating in the field of natural gas in Greece if PPC’s plans to buy a stake in Greek natural gas operator DEPA fall through. PPC last year said it would seek to exercise its option to buy 30 percent of the state-controlled gas monopoly but the purchase is dependent on approval by the Greek government, which has not yet indicated its willingness to give it. PPC and RWE will also look at the development of wind parks jointly with PPC’s renewable energy subsidiary. Rhodes Separately, PPC said it would build a new power plant on the island of Rhodes to cover increasing demand. PPC will spend 250 million euros to build a 120 MW plant on the southern part of the island, which is expected to become fully operational by 2012, the company said in a statement. PPC is upgrading old inefficient units and building new plants to meet growing demand and cope with increasing competition after the country liberalized its energy market last year to meet EU guidelines. PPC will also proceed with a 57-million-euro upgrade of its underground cables, raising their capacity to 150 KV from the current 66 KV, it said. Higher summer demand on the island until the new plant comes on line will be partially met by mobile power units with a total capacity of 25 MW, which have already been ordered by the company, it said. (Reuters)