IPTO awaiting approval of 20% Ariadne sale for €40m minimum

Power grid operator IPTO’s needed approval from RAE, the Regulatory Authority for Energy, of its sale plan offering a 20 percent stake in subsidiary firm Ariadne Interconnection, tasked with the development of the Crete-Athens grid interconnection, is now in the hands of the authority, sources informed.

A condition setting a minimum sale price of 40 million euros, or 20 percent of the nominal value of Ariadne’s equity capital, totaling 200 million euros, has been included in the plan, the sources added.

It also includes criteria that will need to be met by prospective bidders, as well as the tender’s steps all the way to the final round, when qualifiers will be given access to the sale’s video data room.

The VDR will offer candidates financial, technical and legal details concerning the Crete-Athens grid interconnection, a project budgeted at one billion euros and slated for completion within 2023.

IPTO has already secured a 400 million-euro loan from Eurobank, an additional 200 million euros will stem from own capital, while the other 40 percent is expected to be provided in the form of EU subsidies, now close to approval.

China’s SGCC, IPTO’s strategic partner with a 24 percent stake, as well as European operators, among them Italy’s Terna and Belgium’s Elia, have all expressed interest ahead of the Ariadne Interconnection tender.

Importantly, IPTO is still awaiting RAE’s approval of WACC levels for the Cretan interconnection project – permitted revenue (2018-2021) and required revenue (2019-2021).

Projects categorized as projects of major significance are legally entitled to additional returns beyond the asset-based yield.

IPTO’s Ariadne Interconnection minority share offer resurfaces

Power grid operator IPTO has reopened the prospect of making available to investors a minority stake in its subsidiary Ariadne Interconnection, established for the development of the Crete-Athens interconnection.

The possible sale essentially remained stagnant during a recent period of administrative changes at RAE, the Regulatory Authority for Energy.

Ariadne Interconnection has been commissioned the project’s construction IPTO but will cease to be involved in any way once the project is delivered to the operator for operation.

IPTO’s administration reminded RAE, in a letter forwarded just days ago, about a concession agreement it has signed with Ariadne Interconnection, offering a detailed description of the relations between the two companies for the Crete-Athens grid interconnection project.

The project was originally planned to be a segment of a wider interconnection plan to link the Greek, Cypriot and Israeli electricity grids, with EuroAsia, a consortium of Cypriot interests, at the helm, before IPTO withdrew the Crete-Athens section for its development as a national project.

IPTO has noted a minority partner in Ariadne Interconnection could be offered a stake of up to 40 percent.

China’s SGCC, a strategic partner of IPTO holding a 24 percent stake, informed, some time ago, that it wants to acquire a 20 percent stake of Ariadne Interconnection. European operators such as Belgium’s Elia and France’s RTE, as well as major investment groups have also indicated they would be interested.

 

IPTO, Ariadne agreement details partnership for Crete link

Power grid operator IPTO has signed a concession agreement with its fully owned subsidiary Ariadne Interconnection detailing their relationship for the Athens-Crete grid interconnection project, energypress sources have informed.

The agreement was prepared with assistance from legal and consulting firms to overcome concerns raised by RAE, the Regulatory Authority for Energy, following a decision by Greek authorities to develop this interconnection as a national project and not as part of the wider EuroAsia project planned to link the Greek, Cypriot and Israeli power grids.

RAE will now assess the concession agreement’s details and make observations, if needed, before procedures commence to bring investors into Ariadne Interconnection for a minority share.

The details of this entry procedure still remain unclear but the energy minister is expected to clarify through related legislation.

One of the ambiguities concerns whether large-scale RES projects on islands will be able to reserve IPTO interconnection capacities.

The Copelouzos group and Terna, for instance, maintain investment plans for Crete. If given the green light by the energy ministry, they will reserve capacities for the Athens-Crete interconnection, provide funds accordingly and be given corresponding stakes in Ariadne Interconnection.

Investors are expected to acquire up to 40 percent of Ariadne Interconnection, according to the IPTO board.

Chinese company SGCC, IPTO’s strategic partner with a 24 percent, has already expressed an interest to acquire a 20 percent stake in Ariadne Interconnection. Other interested parties include European operators, among them Belgium’s Elia and France’s RTE, as well as prominent financial groups possessing major investment portfolios.

IPTO in talks with investors, operators for Crete interconnection

Investors – funds and major operators – are believed to be expressing strong interest for a minority stake in power grid operator IPTO’s subsidiary Ariadne Interconnection, the project developer of the Athens-Crete electricity grid interconnection.

Talks with parties interested in an Ariadne Interconnection stake have commenced, the power grid operator’s deputy chief Yiannis Margaris informed media during a press call for a presentation of the company’s annual financial results.

Prospective Ariadne shareholders must be financially robust, well acquainted with energy-sector matters, and focused on long-term investments, Margaris pointed out, setting terms and conditions.

The operator is focusing its search on big groups with portfolios carrying major investments, the deputy said.

IPTO’s administration is already engaged in talks with European operators such as Belgium’s Elia and French operator RTE, Margaris indicated.

IPTO expects to sign a bank loan agreement this month for an amount between 400 and 500 million euros to help finance the Athens-Crete interconnection. A sum stemming from Ariadne’s cash reserves worth 200 million euros and National Strategic Reference Framework (NSRF) funds of between 300 and 400 million euros are also expected to contribute.

The Athens-Crete link project is set to start and all the funds must be in place, IPTO officials said.

The possible involvement in Ariadne of investors will help achieve better borrowing terms, the officials added, while stressing the two procedures – search for a minority shareholder and capital – are moving ahead independently of each other.

Talks are also in progress with investors for island interconnections to facilitate RES projects, Margaris said.

PM decision on Crete link, wider PCI plan support needed today

Negotiations ran throughout the day until late last night as all sides involved sought to determine if an agreement is possible on the prospective Crete-Athens power grid interconnector and whether the wider Athens-Crete-Cyprus-Israel interconnection, an EU project of common interest (PCI), remains feasible under the current conditions.

Greek Prime Minister Kyriakos Mitsotakis must inform the European Commission  today on whether Athens supports the wider PCI project, a stance that would incorporate the Athens-Crete segment, or pursue this segment separately as a national project.

A European Commission PCI committee is meeting today to discuss the EU’s new PCI list for the next two years.

Greek power grid operator IPTO has been embroiled in a dispute with Cypriot consortium EuroAsia Interconnector over development control of the wider project’s Crete-Athens segment. EuroAsia Interconnector heads the wider project and has been joined by Elia, Belgium’s electricity transmission system operator, in a strategic alliance.

The Cypriot side entered yesterday’s negotiations with a slightly improved offer but the Greek side still considers it insufficient for constructive talks.

The Greek government has set red lines for the Athens-Crete segment, including no further delays for ongoing tenders offering converter station contracts, which effectively means technical term revisions will not be accepted. Greek officials insist compatibility for the wider project is ensured.

IPTO in Crete link talks with RTE, Elia, Scottish Power

Greek power grid operator IPTO has begun its search for strategic partners in the development and operation of the Crete-Athens grid interconnection, sources have informed.

Last week, the operator’s chief executive Manos Manousakis informed a tender offering a stake in Ariadne Interconnector, an SPV established by IPTO for the project’s development, would be launched by the end of February with the aim of selecting new strategic investors within the next three months.

At this stage, IPTO appears to be planning to offer a 49 percent stake of its SPV to strategic partners for the Crete-Athens grid link project, budgeted at one billion euros.

IPTO has already approached three European operators, France’s RTE, Belgium’s Elia and Scottish Power, a subsidiary of Spain’s Iberdrola, the sources informed. Talks between IPTO and RTE, a participant in the power grid operator’s recent sale offering a 24 percent stake, are believed to have made the most progress so far.

IPTO has already taken preliminary pre-construction and financing steps for the Crete-Athens project, needed to combat a looming energy shortage threat on Crete. The operator, determined to pursue the link as a national project, is aiming for a 2022 launch.

IPTO has been embroiled in a dispute with Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project, for control of the Crete-Athens segment.

Compromise reached for Crete-Athens link, tender soon

Greek power grid operator IPTO will remain at the helm of the Crete-Athens grid interconnection, as its project promoter, all sides involved appear to have agreed at a meeting in Brussels yesterday.

The development is in line with the overall position maintained by energy minister Giorgos Stathakis, who has been shown a willingness to discuss various options under the condition that these ensure control of the project for IPTO and a swift launch of its development

Greek officials are believed to have accepted some level of compromise. The details of this softened stance remain unknown but should be included in a document to be forwarded by the European Commission to all interested parties during the current week.

The Crete-Athens interconnection, ready for development in terms of technology and financing, according to IPTO, is crucial to ensure power sufficiency on Crete as of 2020.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider PCI-status Greece-Cyprus-Israel grid interconnection project, has fought for control of the Crete-Athens segment with IPTO.

Yesterday’s agreement paves the way for a tender early in 2019 to facilitate the launch of work on the Crete-Athens link.

The Greek and Cypriot regulatory authorities for energy, Greek and Cypriot government officials, as well as representatives of IPTO, Euroasia Interconnector, ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Belgian operator Elia, took part in yesterday’s meeting.

IPTO OKs technical committee for Crete link, wants swift action

Power grid operator IPTO will accept the establishment of a technical committee for a supervisory role concerning compatibility between the Crete-Athens grid interconnection and a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, but wants this committee to have delivered its final decisions by November 30 for avoidance of further delays to the Crete-Athens segment.

The Crete-Athens interconnection, ready for development in terms of technology and financing, according to IPTO, is crucial to ensure power sufficiency on Crete as of 2020.

IPTO is expected to present a full plan at a meeting in Brussels today to focus on compatibility issues concerning the Crete-Athens segment and the wider Greece-Cyprus-Israel grid interconnection.

RAE, the Regulatory Authority for Energy, recently named the SPV “Ariadne Interconnection”, an IPTO subsidiary, the Crete-Athens link’s project promoter. Euroasia Interconnector, a consortium of Cypriot interests, heads the wider Greece-Cyprus-Israel interconnection project. IPTO and Euroasia have fought for control of the Crete-Athens link segment.

The Greek and Cypriot regulatory authorities for energy, Greek and Cypriot government officials, as well as representatives of IPTO, Euroasia Interconnector, ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Belgian operator Elia, are all expected to take part at today’s meeting.

IPTO establishes SPV for major-scale Cretan link

Power grid operator IPTO has established a special purpose vehicle (SPV) named Ariadne Interconnection for the financing and development of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Last week, RAE, the Regulatory Authority for Energy, decided to award IPTO control of the project’s development. The authority could set official terms during the day. RAE has already given IPTO a related road map whose content includes advice on financing through the Europe Connecting Facility (CEF), an EU funding instrument developed specifically to direct investment into European transport, energy and digital infrastructures.

The Ariadne Interconnection SPV, established as a wholly owned subsidiary of IPTO, will begin operating with startup capital of 200 million euros. It will be responsible for the Greek segment of the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete.

Euroasia Interconnector, a consortium of Cypriot interests responsible for the wider project, has been given until December 10 to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

IPTO and Euroasia Interconnector have been involved in an extended dispute for control of the wider project’s Cretan segment.

IPTO has been given the right to stage a tender offering the venture’s remaining 10 percent. Belgian operator Elia and France’s RTE have both expressed interest.

 

 

RES producers excluded from Cretan major-scale link’s SPV

Certified network operators, primarily, and possibly financial institutions, will be entitled to take on minority roles in a special purpose vehicle (SPV) to soon be established by Greece’s power grid operator IPTO for the development of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Companies with existing electricity production roles will not be able to participate in the SPV, whose 10 percent will be offered through a tender. This essentially means holders of licenses of major wind energy projects on Crete will not be able to join the SPV.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, will be offered priority rights for a 39 percent minority stake. If this consortium does not exercise this priority right for all or any of the 39 percent it is entitled to, then any leftover portion will be added to the 10 percent stake to be offered to certified network operators and, perhaps, financial institutions.

IPTO is rushing to form the SPV in an effort to counter to Crete’s looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests, have been involved in an extended dispute for control of the wider project’s Cretan segment.

The SPV will initially stand as a wholly-owned IPTO subsidiary and, three months later, by the end of the year, a tender will be staged inviting investor-operators to bid for a minority stake in the venture.

Belgian network operator Elia and France’s RTE have both expressed interest in the major-scale Cretan interconnection project. It remains unclear if they will seek to join the Euroasia Interconnector consortium for part of the SPV’s 39 percent stake or focus on the 10 percent stake.

RAE, the Regulatory Authority for Energy, awarded IPTO the task of swiftly establishing a special purpose vehicle, and its majority 51 percent stake, this week in a decision that runs against a European Commission initiative that gave the Euroasia Interconnector consortium until the end of the year to resolve its dispute with IPTO. The European Commission has yet to offer an official response.

It is not yet clear if the issue will be added to the agenda for upcoming talks between the government and post-bailout inspectors.

IPTO given control and task of forming SPV for urgent Cretan link

RAE, the Regulatory Authority for Energy, has decided to award Greece’s power grid operator IPTO the task of swiftly establishing a special purpose vehicle (SPV) for the development of Crete’s urgently needed major-scale electricity grid interconnection with Athens, sources have informed, confirming a previous energypress report.

Highlighting the level of urgency the matter has acquired, IPTO officials were informed of the decision over the phone and asked to set up an SPV as soon as possible.

Crete faces a looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

According to sources, the SPV will initially stand as a wholly-owned IPTO subsidiary while, three months later, by the end of the year, a tender will be staged inviting investor-operators to bid for a minority 49 percent stake in the venture.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, will be offered priority rights for a 39 percent minority stake, as noted in a Memorandum of Cooperation signed by IPTO and the Euroasia Interconnector consortium.

If Euroasia Interconnector, a consortium of Cypriot interests, does not exercise this priority right, then the minority 39 percent stake will be offered to network operators such as Belgium’s Elia or France’s RTE, both of which have expressed interest. They would be expected to also seek acquiring the remaining 10 percent stake.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests, have been involved in an extended dispute for control of the wider project’s Cretan segment.

The RAE decision comes as a counterproposal to a European Commission initiative that gave the Euroasia Interconnector consortium until the end of the year to resolve its dispute with IPTO. But it does give the consortium some time to decide.

 

 

Brussels gives Elia intermediary role for delayed Cretan link

The European Commission has given the Belgian electricity transmission system operator Elia an intermediary role to seek solutions for the development of the major-scale Cretan interconnection, both in terms of the line-up of the consortium to undertake the project and technical details.

Brussels has decided to take initiatives following the breakdown in negotiations this summer between Greece’s power grid operator IPTO and Euroasia Interconnector – a consortium of Cypriot interests awarded the development of the wider PCI-status Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids – for development control of the Athens-Crete segment of the wider link.

Crucial decisions will need to be made in September on the schedule and method of development of the project, crucial for the the country’s grid.

The European Commission has extended a Euroasia Interconnector consortium deadline until the end of the year, for progress solutions, before the Euroasia Interconnector project is officially branded a delayed PCI project. Euroasia Interconnector will need to find solutions over the next four months.

Meanwhile, RAE, Greece’s Regulatory Authority for Energy, facing a looming energy sufficiency threat on Crete as of 2020, is seeking to commission the Crete-Athens link’s development as soon as possible. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, will cease to apply at the end of 2019 and force the closure of units.

Responding to the summer’s failed talks between IPTO and Euroasia Interconnector, the European Commission appears to have indicated that the Euroasia Interconnector project cannot be broken down into two separate projects – as a PCI-status Greek, Cypriot and Israeli power grid link and a national Athens-Crete link.

Elia and IPTO officials are scheduled to hold a meeting in Athens on September 3. The Elia board is also likely to convene for a discussion on the matter this coming autumn, possibly within the month of September.

RAE, on edge as a result of the energy sufficiency threat on Crete, has indicated it will reach decisions for the Crete-Athens link by September 12.

Also, Greek, Cypriot and Israeli officials are expected to stage a top-level three-way meeting within September to discuss energy matters, especially the Euroasia Interconnector issue, as well as East Med, the natural gas pipeline plan.

Slow Athens-Crete link action raising island’s energy fears

Crete’s major-scale electricity grid interconnection with Athens is a PCI-status project as it represents a part of the wider Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids, meaning EU terms and conditions will need to be observed for the Crete-Athens link, the European Commission informed participants at a related meeting in Brussels earlier this week.

Greek and Cypriot regulatory authorities for energy, the European Commission, and the Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector project, took part in the meeting.

Officials of Greece’s power grid operator IPTO, which is at odds with the Euroasia Interconnector consortium for control of the Athens-Crete link’s development, skipped the meeting claiming there was no chance of any agreement on the issue with Euroasia Interconnector, a consortium of Cypriot interests.

The Athens-Crete interconnection has fallen behind schedule. Slow-moving bureaucratic procedures in Brussels have intensified Greek concerns of a serious power sufficiency problem on Crete as of 2020. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

The Athens-Crete link’s PCI status promises to offer the project fast-track licensing advantages, reduce the risk of legal challenges by rival companies, and ensure transparent procedures.

RAE, Greece’s Regulatory Authority for Energy, will most likely award the Athens-Crete link’s development to IPTO, but, even so, the power grid operator will need to stage a tender and include other companies. Belgian power grid operator Elia, currently examining details of the wider Greek-Cypriot-Israeli link, is believed to be interested in participating in the Athens-Crete project.

Valuable time will have been lost by next month, when developments are expected, which will increase the urgency of Crete’s looming energy sufficiency problem.

 

 

IPTO to skip Brussels meeting on Euroasia Crete link dispute

Greece’s power grid operator IPTO has chosen not to be represented at a meeting scheduled for today in Brussels as an effort to resolve the operator’s dispute with the Euroasia Interconnector consortium for control of the development of Crete’s major-scale electricity grid interconnection with Athens.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, has insisted on also controlling the project’s Cretan segment.

The adamant stance of Euroasia Interconnector, a consortium of Cypriot interests, makes it pointless for IPTO to be represented at today’s meeting, IPTO officials have concluded, according to enegypress sources.

The Greek and Cypriot regulatory authorities for energy and European Commission officials are all expected be participate at today’s meeting.

Over the past couple of months, the Euroasia consortium has claimed Belgian power grid operator Elia would finance its stake in the Euroasia project. This has yet to occur.

According to sources, Elia intends to conduct a feasibility study to decide if its involvement in the investment plan for the Greek-Cypriot-Israeli interconnection project would be viable.

Sources have not ruled out a meeting between IPTO and Elia officials during the current month for investment plan talks.

At this stage, RAE, Greece’s Regulatory Authority for Energy, appears likely to award IPTO the Crete-Athens segment of the wider project by early September.

IPTO, Euroasia meet seeking consensus on Crete interconnection

IPTO, Greece’s power grid operator, and Euroasia Interconnector, both vying to secure control of the construction of Crete’s major interconnection, linking the island’s grid with Athens, held an initial meeting yesterday, six days into a ten-day deadline set by the Greek and Cypriot regulatory authorities for energy for an agreement.

The Greek and Cypriot regulatory authorities are being pressured by the European Commission to push for a solution.

According to energypress sources, IPTO took the initiative and extended an invitation to Euroasia Interconnector, which agreed to a first round of talks. Even so, no progress appears to have been made at this first session. Both sides are believed to have stuck to their initial positions.

At yesterday’s meeting, IPTO presented Euroasia Interconnector a shareholders agreement based entirely on the details included in a Memorandum of Understanding (MoU) signed by the two sides last October. It envisions a stake of at least 51 percent for IPTO in the project, 39 percent for Euroasia Interconnector, and 10 percent for private-sector investors. Euroasia Interconnector pledged it would offer a response to this plan within the next few days.

The MoU foresees the establishment of a special purpose vehicle (SPV) by IPTO and Euroasia Interconnector for the project’s financing and development. This appears to be a pivotal detail keeping the two sides apart.

Euroasia Interconnector contends that it is responsible for the project’s construction and has noted the SPV should only concern financial aspects.

The Euroasia Interconnector consortium insists it was formed to link the Greek, Cypriot and Israeli power grids via a Crete interconnection as an entire project, adding it has already been classified as an EU Project of Common Interest (PCI). As a result, Euroasia not only holds priority rights over the Cretan section of the overall interconnection project but has an overall responsibility as well, Euroasia Interconnector contends. Euroasia has noted it only recognizes ACER, the European Agency for the Cooperation of Energy Regulators, as a supervisory body.

Euroasia Interconnector has already reached a partnership agreement with Belgium’s ELIA and contends it can fully cover the project’s entire financing needs, a claim that remains unsubstantiated. The credit ability of Euroasia Interconnector represents a key factor in any future agreement for collaboration between IPTO and Euroasia Interconnector. IPTO has already made significant progress in this faculty following the recent signing of a 200 million-euro loan agreement, at a favorable interest rate, with the Bank of China and ICBC.

At a meeting last week, European Commission officials clearly favored the Greek and Cypriot regulatory authorities as the two bodies responsible for handling the dispute. This means that commitments based on decisions already made by the two regulatory authorities should remain valid.

On the one hand, Euroasia Interconnector has been granted a license for the overall project under the condition that the Crete-Athens interconnection will be co-developed with IPTO, while, on the other, IPTO has already included the Crete-Athens interconnection into its ten-year plan under the condition it collaborates with Euroasia Interconnector.

If the dispute is not settled soon, both sides could loose their existing rights to the project, which would require a restart of the entire procedure, an authority told energypress.