Consultants for IPTO split expected prior to troika arrival

The energy ministry is expected to soon announce its choice of consultancy firms to be commissioned with the task of evaluating IPTO, the power grid operator, and also offering financial solutions with regards to the operator’s planned breakaway from parent company PPC, the main power utility, as part of the effort to end the latter’s dominance in the Greek electricity market.

According to souces, two consultancy firms, Lazard and SOL will be hired for the task ahead of the latest arrival of creditor representative technical teams, likely to be back in Athens within the current week to review Greek bailout-related reforms.

The appointment of the consultancy firms will signal the beginning of proceedings leading to IPTO’s split from PPC.

Greek officials want to have hired the consultancy firms before the return of the technical teams to Athens as the country’s creditor representatives are not fully convinced Greek officials will carry out the IPTO plan. On the contrary, energy ministry officials are keen to prove they are keen to do so.

Once the evaluation process has been completed by the independent consultancy firms, procedures will be launched for a tender offering a 20 percent stake of IPTO to a strategic investor, as part of the process to compensate PPC.

According to the new plan, a 29 percent stake of IPTO will also be made available to investors through the Athens bourse. The Greek state will acquire a 51 percent of the new IPTO company, to acquire PPC’s fixed assets (networks).

An amendment to legislation concerning a preceding plan entailing the sale of a 66 percent stake of IPTO will need to be ratified in Parliament. The amendment will need to detail all aspects concerning PPC’s compensation for the IPTO breakaway, including the schedule and minority shareholder rights.

Planned NOME auctions, to offer independent firms access to PPC’s low-cost lignite sources as part of the plan to break the power utility’s dominance, will also be a key issue during the upcoming round of talks between the troika review team and Greek officials.

According to sources, numerous differences have already been resolved via email, but creditor representatives continue to believe the model proposed by Greek officials is not yet up to grade to attain the objective of reducing PPC’s retail electricity market share by 50 percent by 2020.