DEPA Infrastructure

IPTO, DEPA Trade, DEPA Infrastucture sales put on hold

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Energy-sector privatizations planned for launch in the second quarter, as well as sales already in progress, are being put on hold as a result of the coronavirus pandemic’s impact on the global economy and the plans of the government and privatization fund TAIPED.

Two thirds of Greece’s privatization program this year concerns energy utilities, as energy minister Costis Hatzidakis has noted.

The freeze on plans includes the sale of an additional stake of power grid operator IPTO, which was planned for the second quarter.

State Grid Corp of China (SGCC), already holding a 24 percent share of IPTO and possessing first-offer rights, has expressed an interest to boost its stake.

However, IPTO and SGCC officials have not been able to meet for talks as a result of the extreme conditions. Greece’s deputy energy minister Gerassimos Thomas had planned a trip to China one-and-a-half months ago but was unable to travel as a result of a travel ban imposed by the Chinese government following the coronavirus outbreak in China early this year.

Two privatization procedures for gas utility DEPA’s new entities, DEPA Trade and DEPA Infrastructure, both of which have drawn considerable interest, have also been put on hold.

The DEPA Trade sale attracted nine bidding teams, domestic and international, for its first round, a turnout interpreted as a vote of confidence for the Greek economy. The sale’s first-round expressions of interest could be appraised in the summer.

No date change, at present, for DEPA Trade privatization effort

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No further scheduling revisions are intended – at present – for the DEPA Trade privatization procedure, whose first-round deadline has already been reset for March 23, government officials have told energypress.

Officials at privatization fund TAIPED are concerned the coronavirus crisis could impact the sale and subdue bidding interest.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

The DEPA Trade privatization procedure can move ahead as planned because the aforementioned deadline has already been extended once and is non-binding, the energy ministry has contended, adding extension requests are limited to a very small number of investors.

Essentially, the ministry, and government as a whole, are determined to avoid any sale delays as this would reinforce the picture of a halt in economic activity.  The government sees the next fortnight as a crucial period for the coronoavirus preventive measures and economy.

Subdued interest by prospective bidders, including funds and consortiums, cannot be ruled out as Greece is still regarded as a high-risk market. These concerns also apply for the country’s two other upcoming major privatizations concerning DEPA Infrastructure and Athens International Airport.

 

Energy firms react against RAE plan for WACC reduction

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The prospect of upcoming WACC level reductions reportedly planned by RAE, the Regulatory Authority for Energy, for gas grid operator DESFA, power grid operator IPTO, as well as the country’s gas distributors EDA Attiki, EDA Thess, DEDA and their parent company DEPA, the gas utility, has unsettled the administrations of all these companies.

Though RAE has not yet reached a decision on the matter, the aforementioned energy companies understand the authority is working to soon lower their WACC levels as a follow-up adjustment to the government’s business tax rate reduction, from 29 to 24 percent.

RAE has endorsed the current WACC levels for a four-year period. A revision at this point would cancel out this endorsement.

The energy companies will push for a delay of any WACC rate revisions until the four-year period has expired, it is believed.

DESFA officials have already pointed out a need for stability and predictability, also stressing the company has invested heavily in the operator during a difficult period for the country.

DEPA’s gas distribution companies fear a WACC revision may negatively impact an ongoing privatization procedure for DEPA Infrastructure, a new DEPA entity established for the privatization.

DEPA and its associated firms have warned DEPA Infrastructure would become a less attractive prospect for nine candidates who have expressed first-round interest, while a revision before the WACC level’s four-year period has been completed could be interpreted as a signal of uncertainty by investors.

Energy sector transactions forecast to grow in 2020

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Energy sector acquisitions and mergers are expected to represent an increased share of overall transactions this year, according to officials at professional services multinational PwC.

The combined effect of a European turn towards investments for green energy growth and Greece’s decarbonization plan is focusing Greek investment interest on the renewable energy sector, PwC officials pointed out during a presentation of an annual report.

Hellenic Petroleum ELPE’s recent decision to purchase an unfinished 204-MW solar energy park from Germany’s Juwi for 130 million euros, as well as petroleum group Motor Oil’s move to acquire a 47-MW RES project from Mytilineos for 45.8 million euros were highlighted as signs of things to come.

PwC officials also confirmed the interest of major foreign funds for RES investment opportunities in Greece, as was disclosed by energypress earlier this week.

Gas utility DEPA’s privatization of DEPA Infrastructure, a new company entity, will be completed this year, while nine prospective bidders, in the procedure’s preliminary stage, have already emerged to express official interest, PwC officials pointed out.

In 2019, Greece’s energy sector represented 5.8 percent of the country’s total number of takeovers and mergers, transactions worth a total of 4.3 billion euros.

 

Italy’s Snam, Italgas face off in DEPA Infrastructure sale

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Snam, Italy’s gas grid operator, and Italgas, the neighboring country’s biggest natural gas distribution company, have emerged as rivals, despite sharing common interests, in a Greek privatization offering a full stake in DEPA Infrastructure, a new entity formed by Greece’s gas utility DEPA.

The Snam group holds a 13.5 percent stake in Italgas. Also, the two companies have a common key shareholder, CDP Reti, holding a 28.98 percent stake in Snam and a 26.05 percent share of Italgas.

The showdown between Snam and Italgas could end up leaving both bidders out of the DEPA Infrastructure privatization, whose deadline for first-round expressions of interest expires today following a slight extension.

The participation of both players in the DEPA Infrastructure privatization would represent a violation of the sale’s terms, privatization fund TAIPED has already pointed out following a related query.

Fully aware of the situation, Snam has sought a solution. The Italian firm could form another consortium as it had done for the sale of Greek gas grid operator DESFA. Snam led a consortium, Senfluga, joined by Fluxys and Enagas, for the acquisition of a 66 percent stake of DESFA.

Two major US funds, KKR and Blackrock, as well as Australia’s Macquarie, are among the field of players tipped to submit expressions of interest today. Two other funds, both undisclosed, one from China, the other from the Middle East, could also participate. Additional entries have not been ruled out.

Strong turnout seen for DEPA Infrastructure sale tomorrow

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A solid build-up to tomorrow’s first-round deadline for a tender offering a full stake in DEPA Infrastructure, a new entity formed by gas utility DEPA, has indicated at least ten European operators as well as funds from beyond the continent will submit expressions of interest.

Snam, Fluxys, Enagas, Italgas, two major US funds, KKR and Blackrock, as well as Australia’s Macquarie, are among the field of players tipped to turn up.

Two undisclosed funds, one from China, the other from the Middle East, are also believed to be among the prospective bidders.

Candidates see DEPA Infrastructure’s investment plan as an opportunity for prospective synergies. Budgeted at 400 million euros, it envisions the development of a series of pipeline projects and other infrastructure in the wider southeast European region over the next five years.

Snam, Fluxys and Enagas, who formed a consortium named Senfluga to acquire a 66 percent of Greek gas grid operator DESFA in 2018, are expected to move independently for the DEPA Infrastructure tender’s first round, fearing antitrust regulations, before regrouping later on.

DESFA wants key role in country’s infrastructure projects

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Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

Additional IPTO stake seen offered within next three months

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The government, gearing up for a series of energy sector privatizations, plans to hasten the sale of an additional yet unspecified stake in power grid operator IPTO. The procedure could now be launched within the next three months.

Investor interest in IPTO has risen as the operator’s asset value is projected to increase sharply over the next decade.

The Greek State currently controls a 51 percent share of IPTO, directly and indirectly. Late in 2019, State Grid Corp of China (SGCC), the buyer of a 24 percent stake in IPTO and holder of priority rights should any additional stake be offered, expressed an interest to boost its stake in the operator and also acquire a 20 percent stake in subsidiary firm Ariadne Interconnector, project promoter of the Crete-Athens electricity grid interconnection, a project budgeted at one billion euros.

The size of the additional IPTO stake to be placed for sale remains unclear, but, without a doubt, SGCC’s decision on whether or not to exercise its priority right will be influential.

Italy’s Terna, holding a 30 percent stake in CDP Reti, an Italian holding company, is also believed to be interested in the upcoming IPTO sale. SGCC would also be involved here as the Chinese company holds a 35 percent stake in CDP Reti. French operator RTE and a variety of funds are also considered believed to be considering the IPTO sale.

IPTO’s assets are seen rising from a present level of 1.5 billion euros to five billion euros over the next ten years as a result of the development of major grid interconnection projects to link the country’s Dodecanese and North Aegean Islands with the mainland.

Greece’s energy-sector privatizations will not be limited to gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade, both underway, nor will there be a gap until the next sale, distribution network operator DEDDIE/HEDNO, scheduled for September, energy ministry officials have informed. The Hellenic Petroleum ELPE sale will be deferred.

 

DEPA Infrastructure sale luring bidders, deadline Friday

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The government and privatization fund TAIPED are expecting strong investor interest in the full sale of gas utility DEPA’s new entity DEPA Infrastructure, a procedure whose deadline for non-binding expression of interest expires this Friday at 5pm.

Authorities will not offer a deadline extension despite requests for more time, sources informed.

Italy’s Italgas, France’s Engie, Spain’s Reganosa as well as two major US funds, KKR and Blackrock, and, possibly, Australia’s Macquarie, are believed to be among the field of players eyeing the DEPA Infrastructure privatization. Senfluga, a consortium made up of Greek gas grid operator DESFA shareholders, is also considering participating in what should be a last-minute decision following related preparations.

Italgas, Italy’s biggest distribution network operator and third biggest in Europe, is believed to have held talks with fellow Italian company Eni for the acquisition of a 49 percent stake of gas distributor EDA Thess, covering the Thessaloniki and Thessaly areas. This stake is currently held by Eni subsidiary Eni Gas e Luce.

France’s Engie, also eyeing other opportunities in the Greek market, has partnered with Energean Oil & Gas and GEK-Terna with the intention of jointly bidding for an underground gas storage facility to be developed at a depleted offshore gas field in the south Kavala region.

TAIPED, the privatization fund, is offering DEPA’s 65 percent share in DEPA Infrastructure while Hellenic Petroleum ELPE is selling its 35 percent stake.

‘DEPA key to Greece’s leading Balkan role, energy diversification’

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Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

DEPA Infrastructure yield, 8.2% + 1.5%, a drawcard for bidders

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Though not yet officially announced, a new annual regulated yield for distribution network operators, now set, represents one of the strongest drawcards for the sale of DEPA Infrastructure, a new entity established by gas utility DEPA for privatization.

Prospective bidders engaged in preliminary contact with authorities linked to the DEPA Infrastructure sale ahead of a February 14 deadline for non-binding expression of interest have been told the WACC figure has been set at 8.2 percent plus a 1.5 percent premium if certain investment objectives are achieved.

These objectives include swift network development in areas covered by gas distributor EDA, achievement of pipeline addition goals, specified in kilometers, as well as the development of projects not included in DEPA Infrastructure’s initial development plan.

Prospective participants, including funds, will enter this privatization procedure knowing their investment’s potential yield can reach 9.7 percent, far higher than WACC performances enjoyed by network operators in central Europe.

This higher yield offering has generated all-round optimism for a solid turnout by participants Friday week.

Potential bidders, so far, are believed to include Greek gas grid operator DESFA, France’s Engie, Italy’s Italgas and Germany’s Eon.

Besides European operators, the privatization is also expected to attract a number of funds, seen partnering with operators for the sale’s second round of binding bids.

DEPA Infrastructure has taken under its wings DEPA’s interests in the distribution networks of wider Athens (EDA Attiki), Thessaloniki and Thessalia (EDA Thess) and the rest of Greece (DEDA).

 

ELPE not on 2020 privatizations list despite priority status, unclear why

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The schedule for the Greek State’s sale of its 35.47 percent stake in Hellenic Petroleum (ELPE) remains unclear despite this privatization being declared a priority by the New Democracy government immediately following its election victory last summer.

Speaking yesterday at an energy conference, Athens Energy Dialogues, energy minister Costis Hatzidakis offered a rundown of the government’s planned privatizations for 2020. ELPE was not on the list.

Signs of a slowdown in the ELPE plan emerged in early autumn when energy minister Costis Hatzidakis requested patience from investors for this particular sale. Ministry officials reiterated this call for patience yesterday.

Towards the end of 2019, the privatization fund TAIPED declared that its 2.4 billion-euro revenue target for 2020 would be achieved as a result of a series of planned privatizations.

TAIPED, at the time, included the ELPE sale on its privatization agenda for 2020, along with Athens International Airport and the two new gas utility DEPA entities, DEPA Trade and DEPA Infrastructure.

Some pundits have attributed the government’s ELPE delay to a decision by the Latsis Group, ELPE’s main shareholder with a 45.48 percent share, not to sell and not wish the entry of any new investor into the petroleum group’s equity make-up.

Certain industry experts have gone as far as to say that the ELPE privatization has been cancelled.

Others are attributing the ELPE sale delay to the launch of the DEPA Trade and DEPA Infrastructure privatizations. ELPE holds a 35 percent stake in DEPA and these new entities, established to serve the DEPA privatization.

Also, less favorable international conditions at present cannot be overlooked. Hatzidakis, the energy minister, has, from early on, been adamant on selling at the right time, when international conditions are at an optimal level.

Operator DESFA seeks role in Greek infrastructure projects

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Greek gas grid operator DESFA, driven by the three-member consortium of Snam, Enagas and Fluxys now controlling the company with a 66 percent stake, appears determined to stretch beyond its operator role and become one of the biggest and most pivotal players in the domestic energy market, judging by its interest in major Greek-related natural gas projects now in progress.

According to energypress sources, DESFA’s administration is looking to acquire stakes in three key energy infrastructure projects: the prospective floating LNG terminal (FSRU) in Alexandroupoli, northeastern Greece; the planned underground gas storage facility at a depleted natural gas field in the offshore south Kavala region; and DEPA Infrastructure, one of gas utility DEPA’s two new corporate entities heading for privatization.

The chief executives of Snam, Enagas and Fluxys, major European operators also holding respective stakes in the TAP project, met yesterday with Greek Prime Minister Kyriakos Mitsotakis.

The officials requested first-hand information on the government’s energy market decisions following the delivery of a new and more ambitious National Energy and Climate Plan and the signing of a trilateral agreement between Greece, Cyprus and Israel for the East Med gas pipeline.

The Greek operator’s controlling consortium also presented investment plans supporting the country’s decarbonization strategy and aspirations to become a regional energy hub.

DEPA, ELPE, south Kavala gas storage privatizations in 2020

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The privatizations of gas utility DEPA – through two separate tenders offering the utility’s trade and infrastructure divisions that have resulted from a split designed for the sale – as well as the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE), stand as the major sales planned by privatization fund TAIPED in 2020.

TAIPED also plans to push ahead with a tender for the conversion of a depleted natural gas field in the offshore South Kavala region into an underground gas storage facility in the New Year.

The DEPA and ELPE privatizations are expected to raise one billion euros from a target of 2.4 billion euros set for 2020. If achieved, this amount will represent a new privatization revenue record for TAIPED.

The DEPA Infrastructure tender is already in progress. Participants are due to express non-binding interest by February 14. The DEPA Trade tender is expected to be launched within January. TAIPED is confident both these sales can be completed in 2020.

A planned privatization to offer a 30 percent stake in Athens International Airport ranks as TAIPED’s other major sale plan for 2020. The Greek State currently holds a 55 percent stake in Athens International Airport S.A. or AIA, the airport authority that owns and manages Athens International Airport.

DEPA Infrastructure sale first-round deadline set for Feb.14

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Interested buyers of DEPA Infrastructure, a new entity emerging from a split at gas utility DEPA, have until February 14 to express non-binding first-round interest in its sale, offering the entire stake, the privatization fund TAIPED has announced.

TAIPED is selling the Greek State’s 65 percent stake and Hellenic Petroleum has contributed its full 35 percent stake.

Strategic investors as well as investment funds seeking strong yields have already displayed strong interest in the sale, TAIPED sources have informed media.

Procedures concerning the privatization of DEPA’s other new entity, DEPA Trade, are expected to begin in the first quarter of 2020. It remains unclear whether ELPE will contribute its 35 percent DEPA stake to this sale. ELPE has noted it will seek to take full control of this new company by acquiring the other 65 percent.

Greek groups, all involved in the energy sector, and foreign groups, some of which have already entered the country’s energy market, are interested in DEPA Trade, TAIPED sources added.

Energy deputy in Berlin Thursday for new round of bilateral talks

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Moving on from his participation at this year’s Greek-themed Capital Link Forum in New York, deputy energy minister Gerassimos Thomas will be in Berlin Thursday for the third round of a Greek-German Action Plan on Bilateral Cooperation.

Greek and German officials will have an opportunity to discuss ensuing steps for energy-sector projects.

Germany’s energy minister is already familiar with Greece’s new National Energy and Climate Plan (NECP), presented by the Greek energy deputy last week at an EU council of energy ministers.

The Greek government has already shown an interest to utilize German decarbonization know-how following the fellow EU member state’s initiatives taken in this domain. The matter was discussed in October by Prime Minister Kyriakos Mitsotakis with the head of RWE.

Germany’s investment interest, consistently firm, has grown even stronger following the Greek government’s recent announcement of a plan aiming for a swifter withdrawal of power utility PPC’s coal generators.

Bilateral energy-sector cooperation was also keenly discussed at a Berlin meeting in August between the Greek leader and German Chancellor Angela Merkel.

Strong German interest exists for all of Greece’s forthcoming energy-sector privatizations. E.on, for example, is among the firms interested in a sale, announced yesterday, offering 100 percent of DEPA Infrastructure, a new entity that has emerged from a split at gas utility DEPA.

DEPA Infrastructure sale to be announced mid-December

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Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

LNG bunkering network for key Greek ports discussed in Rome

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The development of an LNG bunkering network covering Greece’s main ports is one of the features included in a Greek-Italian Memorandum of Cooperation signed yesterday in Rome.

Italian officials, driven by increased LNG usage, internationally, proposed the development of LNG bunkering stations at major Greek ports during Prime Minister Kyriakos Mitsotakis’ visit to the neighboring country. The Greek leader was joined by energy deputy Gerassimos Thomas.

Discussion on the development of an LNG bunkering network in Greece goes back a number of years, steered by an EU directive from 2012 focused on the use of cleaner shipping fuel.

Unlike Italian ports, Greece’s ports have lagged behind in this department. In Italy, Edison has pushed ahead with many such investments, big and small-scale.

The objective, in Greece, is to develop a network to cover 15 percent of bunkering needs over the next decade and 25 percent by 2050. Italian know-how would provide valuable support.

Italgas, Italy’s biggest natural gas distributor, has displayed an interest in bidding for DEPA Infrastructure, one of two new gas utility DEPA entities emerging for the gas company’s upcoming privatization.

In a lesser-known development, Greece has received a proposal concerning the use of Italian gas storage facilities, for a fee, until an underground offshore facility south of Kavala is developed to bolster the country’s energy security, according to sources.

The Greek-Italian collaboration plan includes an upgrade of the existing submarine electricity grid interconnection linking the two countries. This line has been plagued by technical problems over recent years, often shutting down for repair work.

Italian energy firms eyeing array of local investments, PM in Italy

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Italian investors are displaying widespread interest for energy investments in the Greek market, including possible stakes in distribution network operator DEDDIE/HEDNO, power grid operator IPTO, gas utility DEPA’s two new entities DEPA Trade and DEPA Infrastructure, as well as joint ventures in wind energy stations, electric vehicle projects and smart grids.

Deputy energy minister Gerassimos Thomas, joining Prime Minister Kyriakos Mitsotakis on an official visit to Rome today, is expected to be informed of this Italian investment interest. Thomas is scheduled to meet with Italian economic development minister Stefano Patuanelli.

The Greek Prime Minister, to meet with his Italian counterpart Giuseppe Conte, can also expect to hear of this Italian investment interest during talks which, besides the refugee crisis, will also address cross-border energy projects such as TAP and East Med.

Snam maintains the most emblematic of Italian investments in the Greek market at present with a 66 percent stake in gas grid operator DESFA, including control of the country’s natural gas transmission and storage infrastructure.

Italian firms are regarded as pioneers in a number of green-energy domains, including smart grids, electric vehicle recharging station installations along highways, even wave power projects.

Just days ago, a consortium comprising Eni, Fincantieri and Terna announced it would commercially develop its pilot project Inertial Sea Wave Energy Converter (ISWEC) for wave energy generation, initially at small Italian islands, followed by projects abroad.

The Greek Prime Minister and his energy deputy will also meet with Italian entrepreneurs, including Eni gas e luce chief executive Alberto Chiarini.

Italy’s Terna, one of Europe’s biggest transmission system operators, is believed to be interested in acquiring a stake of IPTO and its Ariadne subsidiary, project promoter of the submarine Crete-Athens grid interconnection.

Enel is considering moves into networks, renewable energy investments and the electric vehicles sector.

Italgas, Italy’s biggest gas distributor and the continent’s third biggest, appears interested in DEPA Infrastructure. Italgas is believed to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Eni, increasing its involvement in pioneering projects, including wave energy, is believed to be looking to increase its Greek market presence, possibly through acquisitions.

 

 

Italgas eyeing Eni’s 49% stake in EDA Thess, DEPA networks

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Italgas, Italy’s biggest natural gas distributor, appears to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Though Eni maintains a favorable view of its business interests in EDA Thess, the retail-focused company’s involvement in networks is not its main international activity. EDA Thess is the sole gas distribution company in Eni’s portfolio.

Privatization procedures at Greek gas utility DEPA appear to have hastened the development. DEPA’s 51 percent stake in EDA Thess is set to be transferred to DEPA Infrastructure, one of two new entities, along with DEPA Trade, to emerge from a DEPA split ahead of the gas utility’s privatization.

The government is moving to privatize the Greek State’s prospective 65 percent in DEPA Infrastructure. The entire company may be sold if Hellenic Petroleum (ELPE), a 35 percent shareholder, joins this privatization.

Italgas is preparing to participate in the DEPA Infrastructure tender once it has acquired – if all goes well – Eni’s stake in EDA Thess, sources informed.

Eni gas e luce is awaiting Greek market developments and will then examine its options concerning the EDA Thess stake, including a possible sale, company officials have responded to media questions, without confirming any finalized deal.

Speaking to Reuters last week, Italgas chief Paolo Gallo informed the company intends to finalize a merger and acquisition agreement by the end of the year, or, possibly, in the first quarter of 2020.

 

Local players dividing interest for DEPA trade, network units

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The country’s major energy sector players are more or less split in their investment interest for DEPA Trade and DEPA Infrastructure, the two new entities to emerge from gas utility DEPA’s privatization plan, but the overall interest for DEPA Trade appears to be more substantial.

The Mytilineos group, Motor Oil and the Copelouzos group have already expressed interest in DEPA Trade and will probably submit bids once the  tender is staged. Hellenic Petroleum ELPE, holding a 35 percent stake in DEPA, is also expected to express interest in DEPA Trade.

The emergence of foreign bidders cannot be ruled out as Greece’s natural gas market is gaining prominence as a hub for the wider region in southeast Europe.

As for the gas utility’s networks, Italy’s Eni, maintaining interests in the trade and distribution markets of Thessaloniki and the Thessaly region, is reported to be interested in DEPA Infrastructure. GEK Terna is also believed to be seriously considering this entity’s gas distribution prospects.

Besides the level of bids, the energy ministry will also take into account the respective business plans to be submitted by investors to the DEPA Infrastructure tender, the objective being to secure further network expansion covering new regions.

Details and procedures concerning the DEPA privatization plan have been included in a draft bill to soon be delivered to Greek Parliament. In the lead-up, the plan will be presented for public consultation, possibly beginning today.

Unlike the previous government’s plan, the Greek State’s entire 65 percent stake in DEPA will be offered through the two new entities.

The DEPA Trade and DEPA Infrastructure tenders are expected to be staged concurrently.

 

 

Besides PPC, hiring, pay limits to also be eased at subsidiaries

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Besides the power utility PPC, rigid recruitment regulations set by ASEP, the Supreme Council for Civil Personnel Selection, will also be eased for subsidiaries DEDDIE/HEDNO, the distribution network operator, and PPC Renewables.

The new terms, to also include a relaxation of remuneration and procurement restrictions, are part of a wide-reaching draft bill to be presented by the energy ministry’s leadership at a Ministerial Council meeting today.

The energy ministry is determined to distance both PPC and its subsidiaries from bailout-related restrictions imposed on public-sector enterprises.

However, the draft bill will not include privatization-plan details for DEDDIE, whose model and procedures will be shaped within the framework of a new PPC business plan being prepared and expected to be completed within December, sources informed.

A finalized decision has been reached on gas utility DEPA’s privatization plan. The corporation will be split into two new entities, DEPA Trade and DEPA Infrastructure, and the Greek State’s entire 65 percent stake will be privatized. Hellenic Petroleum ELPE controls DEPA’s remaining 35 percent.

Also, DEPA’s international projects will be removed from the utility and incorporated into a new autonomous state-controlled company. The gas utility’s international projects include its stakes in the IGB and Poseidon pipelines, plus Memorandums of Cooperation and agreements, such as the Alexandroupoli FSRU plan.

The draft bill does not appear to include any terms on the futures of DEPA employees and sub-contracted staff members.

DEPA shape almost set, issues remain on FSRU, Int’l projects

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Gas utility DEPA’s restructured look ahead of its privatization is detailed in an energy sector draft bill to be discussed by the Ministerial Council at a meeting scheduled for tomorrow.

The sale of the Greek State’s entire stakes in two new entities to emerge from DEPA’s planned split into DEPA Trade and DEPA Infrastructure is now considered a certainty.

However, two key issues remain unresolved. The government has yet to decide on whether DEPA’s planned 20 percent buy into Alexandroupoli FSRU, considered most likely, will end up with DEPA Trade. This ambiguity also applies for the project’s capacity reservation to be made by the utility. DEPA’s anticipated 20 percent stake in the Alexandroupoli FSRU could be attached to DEPA Infrastructure and the capacity reservation to DEPA Trade.

The addition of a 20 percent stake of the Alexandroupoli FSRU to DEPA Trade promises to boost the corporate entity’s value in the upcoming privatization.

The second major issue at DEPA concerns the corporate placement of the utility’s international projects. They could end up becoming part of an existing state company, such as EDEY, the Greek Hydrocarbon Management Company, or a new company. The latter option is likeliest, as an EDEY attachment carries various complexities, sources informed.

 

DEPA examining Alexandroupoli FSRU stake, role in privatization

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Gas utility DEPA is contemplating its entry into the equity line-up of an FSRU planned for Alexandroupoli, northeastern Greece, and, if so, whether this stake would be incorporated into DEPA Trade or DEPA Infrastructure, two new divisions to emerge ahead of the utility’s upcoming privatization.

DEPA’s stake in the Alexandroupoli FSRU, expected to be 20 percent, would make a good selling point for DEPA Trade ahead of the privatization. Finalized decisions by the DEPA board are expected soon. Neighboring Bulgaria’s liberalized gas market, in which DEPA already enjoys a presence, will be taken into account.

A project budgeted at 380 million euros, the Alexandroupoli FSRU, promoted by Gastrade, has reached a very mature investment phase. The unit is planned to be moored 17.6 kilometers southwest of the Alexandroupoli port.

According to the project plan, the facility’s LNG storage capacity will be between 150,000 and 170,000 cubic meters, while LNG regasification will be performed at the FSRU and then transported to mainland pipelines via a 28-kilometer pipeline, of which 24 kilometers will be under water.

The details of the DEPA Trade and DEPA Infrastructure privatizations still remain uncertain. According to some sources, both procedures could be staged concurrently and offer investors as much as 65 percent of each division, in other words, the Greek State’s entire stake in DEPA. Hellenic Petroleum ELPE owns the other 35 percent of DEPA.

Concurrent DEPA infrastructure, trade unit sales being planned

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Privatization fund TAIPED plans to stage concurrent tenders offering stakes of up to 65 percent in DEPA Trade and DEPA Infrastructure once legislation has been ratified to enable gas utility DEPA’s split into these two new corporate entities.

The Greek State holds a 65 percent stake in DEPA, while Hellenic Petroleum ELPE holds the other 35 percent.

The Greek State’s entire stake in DEPA – both infrastructure and trade – could be offered to investors, energy minister Costis Hatzidakis noted yesterday.

A DEPA draft bill enabling the sale of the Greek State’s entire share will be submitted to Greek Parliament within October, along with power utility PPC revisions and a wider framework for more extensive energy market liberalization, the minister added.

The level of the Greek State’s DEPA stake to be privatized will be determined once ELPE decides on the future of its 35 percent share in the gas utility.

It is believed ELPE could sell its stake in DEPA Infrastructure and seek control of the gas utility’s trading interests.

Aggressive DEPA privatization in making, draft bill next month

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Gas utility DEPA’s state-controlled era appears to be reaching its end as the energy ministry is looking to privatize the Greek State’s entire stake in the utility’s trading and infrastructure interests.

The Greek State – via privatization fund TAIPED – holds a 65 percent stake in DEPA, with Hellenic Petroleum ELPE owning the other 35 percent.

DEPA is at the forefront of the recently elected conservative New Democracy government’s privatization program, sources informed.

The Greek State’s interests in DEPA Trade and DEPA Infrastructure – the two new corporate entities formed through a DEPA spit plan engineered by the former Syriza government’s energy minister Giorgos Stathakis – will be completely withdrawn, the sources noted.

The former government was planning to offer a majority stake of DEPA Trade followed by a minority stake of DEPA Infrastructure.

Required legislation needed to proceed with the revised DEPA plan will be attached to a draft bill concerning changes at power utility PPC, expected in parliament early next month.

The DEPA legislative revisions will enable a complete transfer of the Greek State’s 65 percent stake in DEPA Trade to the privatization fund. Current law permits the transfer and sale of 50 percent plus one share.

The transfer to TAIPED of a 66 percent share of the Greek State’s stake in DEPA Infrastructure is also being planned, according to some sources, while others have not ruled out a full 100 percent transfer. The previous government had ratified law limiting DEPA Infrastructure’s privatization to less than 49 percent.

Sources have informed of yet another change in the making that entails the establishment of a new company and transfer, to it, of DEPA’s stakes in pipeline projects such as the IGB, Poseidon, East Med and IGI. Current law obligates such a company to remain a part of DEPA Infrastructure.

All these changes are expected to be finalized within the next few days.

Energy ministry pushing for swift completion of DEPA privatization

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Swift completion of gas utility DEPA’s privatization procedure is a key objective for the energy ministry, whose choice of sale model will be strongly influenced by the time needed for implementation.

Opting to continue with the previous Syriza government’s unfinished DEPA sale procedure, instead of adopting a more recent New Democracy administration proposal that would entail the establishment of a holding company, appears to be the likeliest way to go, energy ministry sources have underlined.

Energy ministry and privatization fund TAIPED officials, along with legal consultant Potamitis Vekris and financial adviser UBS, held a meeting yesterday to discuss the DEPA privatization.

The previous government’s DEPA sale plan, involving a company split designed to offer investors separate stakes in two new entities, DEPA Trade and DEPA infrastructure, appears to be the favored option at this stage, with one big difference, this being to offer majority 65 percent stakes in each of the two new companies.

Under the Syriza version, investors would have been offered a majority 50.1 percent stake of DEPA Trade and 14 percent minority stake of DEPA infrastructure.

The government’s newer and less likely option, entailing the establishment of a holding company as a platform for two to three companies representing DEPA’s trading, network and international activity interests, has not been completely ruled out.

The recently elected government wants the DEPA privatization to be among its first sales. It intends to launch a tender in autumn for completion as soon as possible.

DEPA privatization revisions headed for parliament in October

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The energy ministry is preparing revisions to the previous government’s privatization plan for gas utility DEPA by the end of this month and will submit a resulting legislative amendment to Greek Parliament in October, sources have informed.

The government intends to offer investors majority stakes in DEPA’s trading and infrastructure departments, a departure from the preceding Syriza administration’s plan to offer a majority stake in the gas utility’s commercial interests followed by a minority share in infrastructure.

Energy minister Costis Hatzidakis has not ruled out structural changes to the Syriza plan, which entailed a DEPA split into two new corporate entities, DEPA Trade and DEPA Infrastructure.

It remains unclear if gas supplier EPA Attiki, covering the wider Athens area, will be merged with DEPA Trade or sold as a separate asset.

Speaking at the ongoing Thessaloniki Trade Fair, Prime Minister Kyriakos Mitsotakis noted DEPA would be included in the government’s first round of privatizations.

The DEPA sale is expected to generate major investor interest.

Also speaking at the Thessaloniki event, Andreas Siamisiis, chief executive at Hellenic Petroleum ELPE, the holder of a 35 percent stake in DEPA, declared the petroleum company would seek to establish majority stakes in the gas utility. The Mytilineos and Copelouzos corporate groups have also expressed DEPA interest in public comments.

 

Upcoming endorsement of new DEPA leadership first of 3 steps

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The privatization fund TAIPED’s anticipated approval, on August 30, of the new leadership at gas utility DEPA represents the first of three key step leading towards a new era for the company.

Earlier this month, Konstantinos Xifaras, a former managing director at gas grid operator DESFA, was named for the equivalent post at DEPA, while Giannis Papadopoulos, managing director at venture capital firm Attica Ventures, was announced as the gas utility’s new company president.

DEPA shareholders will immediately follow up with an extraordinary meeting to offer their approval of the company’s new two-pronged leadership.

Around the same time, a second key step is planned to be taken in the form of an amendment to be submitted to Parliament for a revision of the previous Syriza government’s DEPA split plan. It had envisioned the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure, as a prelude to the sale of a 50.1 percent stake in the former and a 14 percent stake in the latter.

The recently elected conservative New Democracy government appears determined to pursue a more aggressive DEPA sale policy that will offer majority stakes in both the utility’s trade and network interests. However, finalized decisions on a new company model, the third key step, have yet to be made.