PV investors prepare action against PPC over its bank concessions

Local renewable energy producers, especially ones active in the solar power sector, fear that concessions made earlier this week by the main power utility PPC to the country’s four main banks in order to appease their concerns, as creditors, over the financial effects of the utility’s bailout required split and sale of subsidiary IPTO, the power grid operator, will further worsen the utility’s troubled payment record to LAGIE, the Electricity Market Operator, which relays amounts to the RES producers.

PPC owes several hundred million euros to IPTO, which, in turn, owes amounts to LAGIE, responsible for the operation and settlement of the energy market in Greece as well as daily energy scheduling. Consequently, LAGIE has fallen roughly five-and-a-half months behind on its payments to RES producers. At present, LAGIE owes a total of 750 million euros to RES producers.

According to energypress sources, RES investors are gearing up for out-of-court action, even court action, against LAGIE over the payment delays. Given the prospect, LAGIE is now under pressure to take action against PPC.

In comments offered to energypress, a RES sector official stated that PPC’s guarantees cannot be limited to the banks and not include utility creditors waiting for overdue payments. The official added that if PPC’s supply contracts with major industrial consumers – meaning the earnings generated – are transferred to banks as a guarantee, then the utility’s cash flow will further weaken and negatively impact the aforementioned chain of payments.