The recently elected leftist Syriza-led coalition government will seek to utilize public assets through bilateral cooperation and bond issues rather than privatizations, including in the energy sector, according to plans being prepared by Finance Ministry officials.
Speaking in Parliament yesterday, Greece’s new Prime Minister Alexis Tsipras put an official end to any energy-sector privatization prospects by declaring that his government will “not give up or sell networks and infrastructure”. This, however, does not mean that PPC, the Public Power Corporation, IPTO, the Independent Power Transmission Operator, and ELPE, Hellenic Petroleum, cannot be developed without private-sector capital investments.
Tsipras noted that the new “National Wealth and Social Security Fund”, as he described the transformed State Privatization Fund (TAIPED), will be based on the principle of “public investments to also draw privately held capital.” Rather than surrender control of infrastructure, the Greek state will instead seek to utilize its assets through bond issues, or project bonds, a widespread practice abroad, offering attractive yields to investors.
Without a doubt, this approach runs contrary to all state-asset developments made under the previous administration, the plans of the country’s creditor representatives, and Greece’s ongoing negotiations with them. It remains to be seen how matters will unfold.
According to sources, the use of project bonds appears to be a suitable tool for IPTO infrastructure projects worth 2.5 billion euros. They include an underwater interconnection project for the Cyclades.
As for the prospect of bilateral cooperation, Tsipras noted yesterday that “the government will offer incentives for foreign investment and bilateral agreements, developmental partnerships with Greek State participation, within EU regulations.”
Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis has already discussed the prospect of developing bilateral agreements with at least two countries, Azerbaijan and Russia. It remains unknown how the European Union would respond to such a plan.
On the country’s hydrocarbon plans, Tsipras yesterday noted that “we will not sell out on our natural and mineral wealth.”
The new government is expected to make changes to an ongoing tender for the exploration and exploitation of twenty offshore blocks in the Ionian Sea, western Greece, and south of Crete that would secure greater control for the Greek state, through a participating state company in consortiums.