New round of PPC lignite sale talks beginning with lenders

Next week’s resumption of negotiations in Athens between the visiting creditor representatives and Greek government officials should quickly indicate whether differences between the two sides on energy sector issues may be resolved. The main power utility PPC’s bailout-required sale of lignite units will be at the top of the agenda. Gas market reforms will also be tackled.

As a prelude, technical officials representing the lenders are scheduled to arrive in Athens tomorrow to commence working on details with energy ministry officials.

In the latest chapter of the lignite ordeal – state-controlled PPC needs to disinvest 40 percent of its lignite capacity and the two sides are negotiating on the sale list’s content – Greek officials are awaiting a response from the European Commission’s Directorate-General for Competition to a request, forwarded last week, seeking to keep PPC’s ageing Amynteo lignite-fired facility on the sale list.

A response from Brussels on whether the Amynteo facility, needing a major upgrade to keep operating, may remain on the sale list is most likely expected tomorrow.

Greek officials, striving to keep the more modern Megalopoli unit off the list, support that its acquisition by investors would contribute to offering them a comparative advantage as PPC would be left with older facilities limited by shorter lifespans.

Energy ministry Giorgos Stathakis recently intervened in favor of an Amynteo sale rather than Megalopoli. Certain pundits believe the Greek government is simply delaying the inevitable and will eventually accept Megalopoli’s inclusion on the PPC sale list.

European Comission officials are confident of sufficient investor interest should Megalopoli be included on the list. Once its content is finalized, a market test will be staged to measure the level of investor interest.