Meliti, Megalopoli units still a profit challenge for buyers

Transforming the Meliti and Megalopoli lignite-fired power stations into profitable ventures continues to represent a major challenge, latest data acquired by investors on the two units included in the main power utility PPC’s bailout-required sale of lignite units has indicated.

Investors contend their calculations based on fresh data do not result in better financial prospects for the two units, both loss-incurring at present, despite certain incentives. A voluntary exit plan offered to employees as a means of cutting payroll costs and other sales and purchase agreement (SPA) term revisions do little to ensure the sustainability of Meliti and Megalopoli, investors have pointed out.

On the contrary, PPC insists appropriate sale term adjustments will generate profit potential for both units.

According to data examined by possible buyers, turnover and operating cost figures concerning Meliti last November produced a deficit of approximately 10 euros per MWh. Earnings of 64.5 euros per MWh were outweighed by operating costs totaling 74.9 euros per MWh and pushed higher primarily by increased CO2 emission right costs.

Revenue and cost figures for Megalopoli have fluctuated wildly, data showed. This facility underwent maintenance on many occasions and often did not contribute to the grid. Last July, revenues at the unit were 64.2 euros per MWh and operating costs reached 68.9 euros per MWh. In September, revenue rose slightly to 66 euros per MWh while operating costs rose sharply to 96 euros per MWh.

Last week, authorities decided to extend a January 23 binding bids deadline to February 6. Investors considering the sale expect new sale-term improvements beyond certain incentives already offered, they have made clear.