ADMIE stake sale edges closer
The government has opened the way for the further privatization of the Independent Power Transmission Operator (ADMIE) through a legislative adjustment to the environmental framework, though the process itself will not start before this fall.
The Environment and Energy Ministry’s discussions with China’s State Grid – ADMIE’s strategic investor – and the main interested party, Italy’s Terna, are currently on ice due to the blow caused by the pandemic to China and Italy. Meanwhile the chairman of State Grid has been replaced, and in the next few weeks the chief executive of Terna will also be replaced.
The administrative changes at the two companies involved in the privatization are forcing the ministry to start contacts and discussions from scratch, probably in June according to sources, so that common ground can be found by this fall and the concession process for an additional state stake can start. An interest in ADMIE has also been expressed to the ministry by Belgium’s Elia, which had also been involved in negotiations for the Greece-Cyprus-Israel interconnection.
Through ADMIE’s further privatization, the government is eyeing the expansion of the share capital with the participation of a third party, a European operator, while satisfying the European Commission’s demands for the containment of the strengthened rights State Grid has acquired in the grid operator, even though it controls just 24% of ADMIE.
According to the concession contract, the state might have the majority stake in ADMIE, but State Grid can block crucial decisions. The project of weakening China’s role in ADMIE is not an easy one, as through the shareholder agreement the Chinese company also maintains the right of first offer in case the state decides to concede another stake.
The Chinese side has made clear its intention to exercise its preferential right by acquiring the stake Greece will put up for grabs, so as to avert the entry of a third investor in ADMIE and the risk of losing its management rights. The government, in turn, has clarified to the Chinese side its plan for the entry of a European operator in ADMIE, but will not risk a rift with State Grid.
