Neither union group activity, including a case to be heard at the Athens Court of First Instance today, nor the country’s uncertain political climate seem to be subduing the interest of the four companies that have emerged as the candidates preparing to bid in an international tender for the sale of 66 percent stake in IPTO, Greece’s Independent Power Transmission Operator, locally referred to as ADMIE.
On the contrary, the prospective bidders, Terna, SGCC, Elia, and PSP, are displaying heightened interest on a daily basis as they go about seeking information on IPTO’s operational aspects, according to energypress sources.
“All four [candidates] are looking at this very seriously and appear set to go for the deal,” said one well-informed sector authority.
The operator’s authorized return on equity capital over the next three-year period – 2015 to 2017 – stands as a significant pending issue that will need to be resolved for the sale to go ahead. Based on the weighted average cost of capital (WACC), due diligence procedures will be able to proceed, while the prospective investors will also be able to determine the amounts of their respective bids, as they will have a clear picture of the company’s expected revenue.
RAE, the Regulatory Authority for Energy, has apparently already reached a decision on the operator’s authorized return on equity capital, but the percentage figure has not been disclosed. It is believed that the weighted average yield will be about 8.5 percent, a level already anticipated by the bidders. Premiums offered by major IPTO projects of pivotal importance are sure to be added.
The foreign bidders see great potential for development in the Greek electricity system, such as network development on the islands, mainland, and international interconnections. It is estimated that approximately ten billion euros will be invested over the next decade, which, of course, will greatly increase the company’s earnings.
Both the coalition and PPC, the Public Power Corporation – IPTO’s parent company – are accelerating procedures for swifter finalization of the planned privatization, which is feasible by the end of the year. This would avert any overlap with possible early national elections.
According to energypress sources, some, if not all, of the four prospective bidders have met with officials at the main opposition leftist Syriza party, currently ahead in various polls. Syriza has said it opposes the privatization of all networks.