Agreement reached on timetable for sale of power grid operator

Negotiations between the Energy Ministry and the representatives of the country’s creditors made significant progress this week with the drafting of a particularly tight timetable that foresees the completion of a complicated plan for splitting the Independent Power Transmission Operator (ADMIE) from Public Power Corporation (PPC).

It is not yet clear whether the final agreement includes a provision contained in the original draft regarding the alternative of a 100 percent sale of ADMIE in the case that the above plan is not achieved.

The agreement between the ministry and the creditors provides for the immediate launch of the process separating the grid operator from PPC just after Parliament ratifies a bill replacing an older law that provided for the sale of 66 percent of ADMIE.

It is reminded that the new bill dictates the sale of a 49 percent stake of ADMIE to the private sector (29 percent to a strategic investor and 20 percent floated on the Greek stock market), while the remaining 51 percent will be passed on from PPC to the state. The bill is also set to regulate all issues pertaining to the compensation that PPC will receive for the sale of the 51 percent stake in ADMIE to the state.

According to the agreed timetable, potential investors will be invited to express their interest in June. Then, the progress of the tender needs to be reviewed in October so that the process of selecting a strategic investor for the country’s power grid operator can be completed by the end of the year.

The situation remains unclear, however, in regards to the reduction of PPC’s share in the country’s retail and wholesale markets, as there were no concrete decisions reached on this point in Tuesday’s meeting between Energy Minister Panos Skourletis and the creditors’ mission chiefs in Athens. Greece’s bailout agreement provides for the sale of 40 percent of PPC’s lignite output in the case that no agreement is reached on the tender for production capacity.

Nevertheless, ministry sources said this week that the real opening of the Greek electricity market will only take place by way of consortiums formed between PPC and private investors. They also said that besides Edison – the Italian company that has already invested in Greece and is controlled by Electricite de France (EDF) – talks are also under way with enterprises from Israel and Russia, as well as the USA. Skourletis on Tuesday met with the head of Edison in Athens.