The country’s bailout agreement lenders have indirectly reintroduced the prospect of main power utility PPC’s part-privatization through the establishment of a new splinter company that would be sold.
According to energypress sources, the issue was raised by lender representatives during talks with local officials both last week and this week after it became apparent that the Greek government wants to avoid privatizing PPC’s subsidiary firm IPTO, the power grid operator, and, instead, pursue an alternative option.
Lenders have said they want IPTO split from its parent company and privatized as part of the latest bailout agreement. However, the lenders have also noted this move is not essential as long as a convincing alternative plan promising equal results, meaning real competition in the electricity market, can be found and implemented.
The return of PPC’s part-privatization to the negotiating table by the lenders was prompted by the failure of Greek officials to embrace the prospect of adopting NOME-type auctions in the local electricity market.
The country’s lenders, especially European representatives, have underlined that the part-privatization solution of PPC would offer impetus to the country’s privatization program, open up Greece’s electricity market to competition, and provide third parties access to the country’s lignite sources, currently monopolized by PPC.
Whether further pressure is applied by lenders on Greece to accept the PPC part-privatization plan will depend on the degree of progress achieved in the bailout negotiations, both overall and for energy-sector matters.