Pressure applied by lenders for PPC, DEPA sales in 2017

The government’s sale of Greek State stakes in PPC, the main power utility, and DEPA, the Public Gas Corporation, has so far been avoided but this is unlikely to continue in 2017 as lenders seem to be linking the case with the completion of the bailout’s second review.

According to sources, energy-sector corporations, especially enterprises active in the electricity and natural gas markets, will need to be included in the next round of privatizations as a means of achieving the privatization revenues target for 2017.

The lenders, according to government sources, will push for the sale of a 17 percent share of PPC held by the Greek State, of 34 percent in total, and its 65 percent of DEPA.

These two sales and that of the Greek State’s share in the Athens International Airport are expected to provide the bulk of Greek privatization revenues in 2017, which, according to the lenders, have been set at roughly 2 billion euros. Preliminary steps, including the announcement of a recruitment procedure for consultants concerning the PPC and DEPA sales, will need to be made by the upcoming Eurogroup meeting on December 5.

A different schedule has been set for the establishment of the country’s new super privatization fund, whose completion and launch needs to be accomplished by the end of this year.

The Government Council for Economic Policy (KYSOIP) had endorsed an Asset Development Plan (ADP), containing 19 assets, last May. For months now, two troika officials placed on the board at TAIPED, Greece’s exisiting State Privatization Fund, have been pushing for the Asset Development Plan to move ahead. It was the cause of great friction between the lenders and Greece’s just-replaced energy minister Panos Skourletis.

The sale of PPC’s 17 percent will be particularly challenging as finding investors during the utility’s bailout-required need to reduce its market share to 49 percent by 2020 will not be easy. Investors are expected to consider investing in PPC once this procedure has been completed.