Main power utility PPC, which recently signed a Memorandum of Agreement with CMEC (China Machinery Engineering Corporation) for joint development of a second lignite-fired power station in Meliti, close to Florina, northern Greece, plans to establish a broader strategic partnership with the Chinese company for business ventures in foreign markets as a means of covering at least some of the losses expected by the the utility from its bailout-required market contraction in Greece.
PPC’s chief executive Manolis Panagiotakis and CMEC president Zhang Chun, leading a group of company officials on a visit to Athens, are expected to sign a strategic partnership agreement in the Greek capital today. It will make official the Greek utility’s plan to seek new business opportunities beyond Greece with CMEC as a partner.
According to sources, PPC and CMEC plan to begin their endeavors by trying to penetrate the Albanian electricity market. If successful, the pair will also tap the Fyrom (Former Yugoslav Republic of Macedonia) and Kosovo markets. The PPC-CMEC partnership plans to eventually stretch out even further to the markets of Iran and Egypt, as well as Turkey.
PPC views an expanded presence in foreign markets as the only way of compensating for bailout-required losses in the Greek retail and production electricity markets. The utility needs to reduce its market share in Greece to less than 50 percent by the end of 2019. PPC’s retail market share slipped to 88.07 percent in September, down several percentage points over the past year. The utility’s virtual monopoly in Greece is gradually eroding.
As part of its foreign markets campaign, PPC has already established a subsidiary firm in Albania but has yet to do likewise in Fyrom and Kosovo.
“If PPC wants to make up for the planned Greek production and retail market share losses over the next few years, joint ventures with a foreign partner for business in the Balkans stand as more than just a strategic choice,” an official told energypress, implying the company’s survival will be at stake.
CMEC will take on a key role that may help PPC succeed in the Balkans following a series of failed attempts in the previous decade or so. The Greek utlity made its first attempt in 2003 in Romania and has since made many more unsuccessful efforts to penetrate neighboring markets. This overall failure can be attributed to the preferences of respective Balkan country governments for stronger western partners, based on reasons concerning wider political expediency, as well as poor judgement on behalf of PPC’s previous administrations.