Main power utility PPC and China’s CMEC (China Machinery Engineering Corporation) are set to sign a Memorandum of Understanding in Athens tomorrow, making official their joint plan to construct Meliti II, a second power station in Meliti, Florina, northern Greece.
The move will lead to the Greek utility’s second-biggest investment following Ptolemaida V, another lignite-fired power station, also in Greece’s north, whose development, pursued with other partners, is at a preliminary stage.
According to sources, the MOU will be signed at PPC’s headquarters by the Greek utility’s chief executive Manolis Panagiotakis and CMEC’s deputy chief Fang Yanshui. Greece’s energy minister Panos Skourletis is expected to attend the signing ceremony.
PPC and CMEC intend to form a consortium in which the Chinese company will hold a majority stake, as energypress has previously reported, based on information provided by sources.
According to these sources, PPC’s exisiting Meliti I power station will be included in the joint veture with CMEC, which will fully finance construction of Meliti II at a cost of 700 million euros.
Both power stations will be be fed lignite from the Meliti region’s mines, beginning with a deposit in Ahlada, located in the Florina region, followed by a mine in neighboring Vevi.
The exact extent of CMEC’s majority stake in the consortium for Meliti II will be determined by the evaluation of the Meliti I unit to be contributed to the venture.
Given the 700 million euros required to construct Meliti II, PPC’s stake may end up falling to a level of less than 40 percent. PPC could become a passive partner without a managerial role or veto rights. A company that owns the Ahlada lignite mine and is already supplying Meliti I is expected to join the venture as a third member. The Vevi mine may also be added to the consortium at a latter stage.
By taking this initiative, PPC intends to offer a solution to a European Court decision demanding the local lignite market’s liberalization. PPC also wants to take matters into its own hands for a bailout-linked measure requiring the corporation to reduce its market share to 49 percent by 2019, both in production and retail activity.