Energy issues not delaying bailout review’s conclusion

Enery-sector issues are not responsible for the delays encountered in the ongoing effort to conclude the bailout’s second review, sources involved in the negotiations have ascertained, without offering any further details.

Greek energy ministry officials held marathon talks yesterday with lender representatives handling technical issues to decide on details to be included in a Staff Level Agreement.

The same sources informed that Greek officials will take part in today’s Eurogroup meeting of eurozone finance ministers having essentially resolved all energy sector issues at a technical level.

It appears that a number of pending labor, fiscal and social security concerns are preventing the negotiating sides from reaching a finalized agreement needed to conclude the second review. Subsequently, the outcome of today’s Eurogroup meeting, expected to determine when the lender representatives could return to Athens in a bid to seal the second review, is difficult to forecast.

Yesterday’s talks between energy ministry officials and lender technocrats focused on the alternatives to be resorted to should a market test in autumn for main power utility PPC’s sales package of carbon-fired power stations indicate insufficient investor interest or a forthcoming review to examine the progress of PPC’s required retail electricity market share contraction produce poor results.

As has been extensively reported by energypress, an agreement on the bailout-required measures has essentially been reached.

The two sides have agreed to the sale of old and new carbon-fired PPC stations representing 40 percent of the utility’s capacity. Details on which units will be picked will be determined over the next six months. The European Commission will be involved in this process. The market test, expected in September, will be crucial. A legislative revision specifying the content of the unit sales package, or packages, will need to be made by the end of December, while the sale process must be launched by June next year.

The two sides have also agreed to include a clause requiring the continuation of NOME auctions, not only for PPC but also private-sector buyers expected to end up with carbon-fired stations currently owned by the utility.

NOME auctions were introduced last October in an effort to break PPC’s market dominance by offering independent traders access to PPC’s low-cost carbon and hydropower sources. The NOME auction progress will be reviewed in two stages, initially in June and followed by December.