Lenders up PPC assets demand for partnerships plan to avoid ‘Little PPC’

The government’s push for a main power utility PPC solution entailing the establishment of partnerships with private-sector firms in order to avoid the utility’s part-privatization could prove to be anything but bloodless, judging by the toughened lender proposals that were recently leaked.

As exchange for overlooking a proposed part-privatization solution for PPC, locally dubbed “Little PPC”, the country’s lenders want PPC to make available a considerably greater amount of electricity-producing facilities for prospective partnerships, in which the utility would hold minority 49 percent stakes and surrender management control.

Prior to leaving Athens last week, the lenders demanded that PPC offer at least 40 percent of its production facilities for the prospective partnerships plan with one or more private-sector firms as a condition if the first review of Greece’s third bailout agreement, reached last summer, is to be completed.

Practically speaking, this would add a further ten percent of PPC’s production capacity to the assets that had been included in a preceding plan to part-privatize the utility.

Amyndeo 1 and 2, Florina 1 – and, possibly, an additional Florina unit – Komotini, the hydropower stations in Platanovrysi, Thisavros, Agra, Edessa, Pournari – 1 and 2 – as well as five mines had been included in the “Little PPC” package. The latest proposal by lenders for the partnerships alternative includes these assets plus an additional 10 percent of PPC’s production capacity.

Tight scheduling is also being demanded. The lenders want the sales to be completed by 2017, while PPC will need to begin its assets separation process by hiring a consulting firm no later than this coming June. Tenders would then be launched in January, 2017, and binding offers will be submitted by June, 2017, according to the plan tabled by Greece’s lenders.

The Greek government has yet to accept the demand. PPC faces a bailout-related obligation to reduce its dominant market share by 25 percent in the short term and 50 percent by 2020.