The Enviroment and Energy Minister Panos Skourletis has reached an agreement with the lender representatives, at a meeting this morning, on the breakway of IPTO, Greece’s power grid operator, and the NOME auctions, with the aim of liberalizing the electricity market.
Skourletis met with the lender representatives at 10.30 am, just before the latter departed for Washington. The meeting had been postponed late last night.
The minister told the Athens News Agency that the IPTO agreement entails transferring a 51 percent share of the operator, a subsidiary firm of main power utility PPC, to the Greek State, in exchange for a compensation package to PPC. As for the other 49 percent of IPTO, a network operator will have the right to acquire at least 20 percent, while the remainder will be placed on the bourse, according to the news agency.
The Greek State will control the new IPTO board’s majority and appoint the new managing director, while procedures for the sale of at least 20 percent of IPTO to an investor will begin in June, according to the agency.
As for the NOME auctions – to provide third parties with access to main power utility PPC’s low-cost lignite and hydropower sources as part of the bailout-related obligation to help break the utility’s dominance – regulations will be established based on LAGIE (Electricity Market Operator) data as well as proposals by RAE (Regulatory Authority for Energy) to be forwarded to the ministry. These initiatives will determine the electricity amounts to be auctioned and the starting price. The first auctions are expected to be staged in the second half of this year.
Discussions on technical details concerning the IPTO plan and NOME auctions will be held during the day between local officials and lender representatives.
Greek privatizations were not discussed at this morning’s meeting between Skourletis and the lender representatives. These will be discussed as a whole, not just for the energy sector, during negotiations for the establishment of a new Greek privatization fund.
The Greek government insists that the Greek State’s equity shares of PPC, DEPA (Public Gas Corporation) and ELPE (Hellenic Ptroleum) that have been transferred to TAIPED, the existing privatization fund, serve only for the bailout review and not privatization procedures.
Earlier in the day, energypress reported:
Privatizations, including ones concerning Greece’s energy sector, are among the “many unresolved issues” in the government’s negotiations with the quartet of lenders, Greek Finance Minister Euclid Tsakalotos announced in the late hours last night, while also declaring that talks to complete the first review of the country’s third bailout package would be suspended so that the lenders could travel to IMF’s Washington-based headquarters.
An hour earlier, Environment and Energy Minister Panos Skourletis, on his way out of the Athens Hilton, where meetings and negotiations are taking place, informed that negotiations would run into “trouble only if lenders insist on the privatization of energy companies.”
Moments later, Skourletis told journalists that his meeting with the lenders last night would be postponed until today, before the finance minister announced, at around 2am, that the talks were being suspended.
Though Tsakalotos did not provide details, it is believed that, besides non-performing loans and pensions, an impasse was also reached on privatizations.
Earlier yesterday, the energy minister, in comments made on local radio station “Sto Kokkino”, had warned that the “lenders are bringing back older plans that he have rejected and which were not included in the bailout agreement last summer, such as privatizations of DEPA (Public Gas Corporation) and ELPE (Hellenic Petroleum).”
The Greek state holds a 35 percent stake in ELPE and 65 percent of DEPA.
The government is pushing to complete the first review of Greece’s third bailout package by Easter so as to push for debt relief at the IMF’s Spring Meeting in Washington this weekend.
According to the Greek government, last summer’s bailout agreement stipulates that debt relief would be discussed as soon as the first review was completed.
Essentially, energy-sector privatizations had never really been cleared from the negotiating table. However, it seems the pressure by lenders has intensified over the past few days.
Shipping and Island Policy Minister Thodoris Dritsas, in an interview for local Mega TV channel last weekend, noted: “We have not committed to privatization revenues of 50 billion euros for the new [prospective] privatization fund. Officials linked to TAIPED [the exisiting State Privatization Fund established prior to Syriza’s rise to power] are seeking to put 26 privatizations on the negotiating table instead of nine that had been agreed to.”
According to sources, the lenders, especially Berlin, will remain adamant on the privatizations.
As had been reported in the past by energypress, the lenders are not content with the nine – plus an additional two – privatizations accepted by the government. Instead, they are pushing for most of the 23 privatizations that had been attached to last August’s third bailout agreement.
TAIPED is expected to continue operating unil it reaches its goal of raising three billion euros of privatization revenues between 2016 and 2018.