The government may have withstood international creditor pressure and not provided legislation enabling the sale of main power utility PPC corporate units should the upcoming NOME auctions – expected in September and intended to reduce the utility’s market share by providing third parties with access to low-cost lignite and hydropower sources – fail to produce results. However, the same does not apply for the breakaway plan of PPC’s wholly owned subsidiary IPTO, the power grid operator.
The government will need to honor tight deadlines set by the creditors for its IPTO proposal entailing the transfer of 51 percent to the Greek State and sale of as much as 24 percent to a strategic investor. The remainder will be placed on the bourse. The revised third bailout agreement reminds that if the IPTO plan does not proceed as expected and reveals any problems, then procedures will begin within 2016 for the sale of IPTO, in its entirety, to private-sector investors in 2017.
The Greek government has expressed confidence that the IPTO breakaway plan will proceed smoothly within the tight deadlines set.
The first of these deadlines arrives on June 30, when PPC, at its scheduled general shareholders meeting, will be granted approval by its main shareholder, the Greek State, to stage an international tender in search of a strategic investor for IPTO. This tender will need to be launched in July and completed by October, according to the bailout agreement’s IPTO conditions.
Other energy-related bailout requirements for 2016 include the need to ratify national law by the end of the first half of the year to guide the electricity market towards the EU target model, and, in the fourth quarter, legislation to bolster the institutional, financial and functional independence of RAE, the Regulatory Authority for Energy.