Greek officials and the country’s creditor representatives, currently engaged in bailout review negotiations, believe that certain disagreements between the two sides over outstanding energy-sector prior actions can be resolved this week.
Completion of the prior actions will pave the way for the disbursement of a subtranche of 2.8 billion euros.
Energy Minister Panos Skourletis did not join a team of ministry associates as well as finance minister Euclid Tsakalotos during Friday’s negotiations with the lenders.
The negotiating sides will push for settlement of the outstanding energy-related prior actions by the end of this week. The overall progress made in the bailout review is expected to influence the energy-related developments.
The outstanding issues include natural gas market reforms. A gas release obligation requires DEPA (Public Gas Corporation) to double the amount of natural gas made available to the industrial sector as well as suppliers to help liberalize the market. A documentation process is now in progress.
Another issue is the renewable energy (RES) special account’s deficit, which will impact the RES-supporting ETMEAR surcharge included on electricity bills. Recently ratified legislation has been designed to eliminate the account’s deficit by the end of 2017. However, the lenders want this deficit to be wiped out at an earlier date, by June, 2017. A decision by RAE, the Regulatory Authority for Energy, on the surcharge level will need to take this demand into account.
As for the troubled privatization effort concerning DESFA, the natural gas grid operator, the lenders are pushing for the nullification of a recent amendment that severely limits the operator’s network usage fee hikes and, therefore, revenue potential. The lenders have noted the move has negatively impacted this privatization attempt. Azerbaijani energy company Socar, the winning bidder in an international tender for the DESFA sale, has threatened to withdraw, noting the amendment has reduced the company’s market value.