Greece’s alternative plan brought forth to avoid privatization of IPTO, the power grid operator, as lenders had initially demanded, appears to have stalled as a result of a shortage of funds required to finance its cost, and not because lenders are insisting on the operator’s sale. A Plan C will now need to be delivered if the operator’s privatization is to be avoided.

The lenders had accepted a Greek proposal for the establishment of a new company to take on IPTO’s fixed assets, but demanded that its management be assumed by a private-sector company, which would enter the deal as a strategic investor, regardless of the stake it will hold in the new company. Based on the plan, the Greek state would hold a stake of at least 51 percent in the new company.

However, the Greek state lacks the funds needed to acquire this 51 percent stake, estimated to be worth at least 500 million euros, which would be paid to main power utility PPC, the operator’s parent company.

Thoughts of compensating PPC with stakes in state-run companies and other utilities, or proceeding with an equity capital increase at PPC appear to be unfeasible options. The majority of stakes held by the state in various state-run companies are now under the control of TAIPED, the State Privatization Fund.

PPC is currently assessing various proposals which may be disclosed over the next few days.