The main power utility PPC’s advisers steering the utility’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity, are confident that, besides local players, a considerable number of foreign investors will also emerge to submit first-round expressions of interest. The deadline for participants expires today.
Over the past few days, it has been rumored that the sale could attract investors from India. This remains to be seen, later today. For the time being, a number of local players, namely GEK-Terna, Mytilineos and Viohalco, as well as the Copelouzos group, expected to join forces with China’s Shenhua for this sale, are believed to be the only certainties.
It is not yet known if any of these probable participants will submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. These details will help participants determine whether the purchase of lignite units represents a sustainable investment or not. Investors are not expected to decide any sooner than next month.
The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of controlling their cost of electricity sold, participating independent suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.
According to European Commission studies and forecasts, emission right costs in the EU, already elevated, are expected to climb further, from 14.43 euros per ton, yesterday’s price, to over 30 euros per ton in 2030.
Given these conditions, investor interest in PPC’s disinvestment of lignite units is expected to be limited to industrial enterprises eligible for offsetting mechanisms compensating such expenses.