The Greek administration is viewing Prime Minister Alexis Tsipras’s current visit to China as a follow-up to Chinese investments in Greece by Cosco for the Piraeus Port Authority (OLP) and SGCC’s (State Grid Corporation of China) agreement with the state-controlled main power utility PPC for a 24 percent acquisition of subsidiary IPTO, the power grid operator, endorsed by the European Commission yesterday.
A barrage of Chinese investments, particularly in the energy sector, is expected following the recent conclusion of the Greek bailout’s second review.
The timing of the European Commission’s approval of the IPTO agreement with SGCC, announced while Tsipras was on his way to Beijing, provides further momentum to the prime minister’s China trip.
The Greek government would view favorably Chinese interest in the upcoming sale of PPC units and 17 percent privatization of the utility, both bailout requirements. Extensive talks have already been held with CMEC (China Machinery Engineering Corporation) for the development of Meliti II, a second carbon-fired power station planned by PPC in the Meliti area, close to Florina in the country’s north.
PPC chief executive Manolis Panagiotakis, accompanying the Greek prime minister on this trip to China, will seek to appease Chinese concerns generated by energy minister Giorgos Stathakis’s recent announcement of the need to stage a new tender for part of the Vevi mine, whose output is essential for Meliti II. Talk of including the Meliti II license in the bailout-required sale package of PPC units has also unsettled CMEC officials.
The PPC chief has proposed constructing two new lignite-fired power stations, not including Meliti II. This plan has not been embraced by the Greek energy ministry as it runs contrary to the bailout agreement concerning the energy sector.
On this visit to China, Panagiotakis, who is expected to meet with officials at CMEC, Shenhua Group, SPIC and the China Development Bank (CDB), will need to convince prospective investors that lignite-fired power stations will remain a key part of PPC’s future operations.