Turbine installed at GEK TERNA-Motor Oil gas-fueled power station

A Siemens HL-class gas turbine, the first to be used in Greece, has been installed at a prospective 877-MW state-of-the-art combined cycle, gas-fueled power station being developed by GEK-TERNA and Motor Oil Hellas in Komotini, northeastern Greece, planned to be launched in early 2024, Motor Oil Hellas has announced.

The project, Thermoilektriki Komotinis, an investment estimated to be worth 375 million euros, promises to be one of the most efficient power plants in Greece. Once operational, it will emit 75 percent less CO2 than lignite-fired power plants.

Thermoilektriki Komotinis is the second gas-fueled power station that has undergone development in Greece over recent years, following the construction, by the Mytilineos group, of an 825-MW unit in Viotia, northwest of Athens, whose commercial launch is imminent.

Construction of a third gas-fueled power station, in Alexandroupoli, northeastern Greece, as a joint venture by power utility PPC, gas utility DEPA and the Copelouzos group, is scheduled to officially commence this Saturday.

The country requires at least three additional power stations to secure energy sufficiency, according to a recent study conducted by power grid operator IPTO for 2025 to 2035.

Two major energy deals promise to reshape Greek market in 2023

Two major deals expected to be struck early in 2023, barring surprise developments, namely Greek power utility PPC’s acquisition of ENEL Romania and Australian fund First Sentier’s takeover of TERNA Energy, promise to further internationalize the Greek energy market, reshaping it in the years to come through new opportunities and balances.

PPC’s completion of an agreement for ENEL Romania, a potential acquisition said to be worth between 1.3 and 1.4 billion euros, would open up the Balkans for the Greek utility and greatly increase the corporation’s size. ENEL Romania is roughly half the current size of PPC.

PPC and ENEL Romania’s parent company ENEL have signed a confidentiality agreement for exclusive negotiations ahead of due diligence.

As for TERNA Energy, the Australian fund First Sentier is believed to have completed its due diligence in November and reached a takeover agreement worth 2.34 billion euros.

According to sources, the Australian fund is now working on a financing agreement with Greek banks before finalizing the agreement.

If TERNA Energy’s share is sold at 22 euros, then the agreement with First Sentier could exceed 2.5 billion euros.

TERNA Energy’s investment plan for 2022-2029 is valued at 5.9 billion euros and includes additional RES installations of 5.5 GW, from 895 MW at present, the objective being to increase annual EBITDA to more than 700 million euros.

 

Trial run of PPC’s Ptolemaida V reaches full capacity

Power utility PPC’s new, state-of-the-art Ptolemaida V power station has entered the final stage of its pre-launch tests. The facility is now injecting electricity into the grid, gradually boosting its input since early December without technical issues.

The new PPC facility was injecting electricity amounts of approximately 300 MW, nearly half its 660-MW capacity, by mid-December, before increasing its grid input to 450 MW last week, and has begun offering levels of as much as 616 MW since December 18.

As is standard practice, internationally, such new facilities undergo three phases of trial tests, the first undertaken by the project’s developer, in this case GEK TERNA.

Ptolemaida V, a project budgeted at over 1.4 billion euros, is expected to be ready for a full-scale launch by the end of February. It will initially operate as a low-emitting lignite-fired power station before eventually converting to natural gas.

GEK-TERNA winning bidder for PPC 550-MW solar farm

GEK-TERNA has emerged as the winning bidder in a tender staged by PPC Renewables for the development of a 550-MW solar farm, one of Europe’s biggest, and its interconnection projects in Ptolemaida, northern Greece, at a location where power utility PPC, PPC Renewables’ parent company, has operated a company-owned lignite mine, sources have informed.

GEK-TERNA outbid five participants, METKA, RES INVEST, CMEC, AVAX and AKTOR, for this solar farm contract, a pivotal project for the decarbonization effort in northern Greece’s west Macedonia region, as well as PPC’s dynamic turn towards renewable energy.

Procurement of the project’s panels and all other equipment will be handled by PPC Renewables.

The project’s completion will represent a milestone for PPC’s business plan, foreseeing a rapid increase in installed RES capacity over the next few years.

PPC Renewables, nowadays organizing tenders for such projects at an extremely fast pace, is aiming for an imminent start in the Ptolemaida solar park’s development, so that this investment, worth roughly 280 million euros, can be completed by 2024.

The Ptolemaida solar farm will rank as one of Europe’s biggest. At present, a 626-MW solar power project being developed in central Spain by Solaria Energia is Europe’s biggest.

The Ptolemaida solar farm will more-than-double the capacity of Greece’s biggest such unit at present, a 204-MW solar power plant developed by ELPE in Kozani, northern Greece.

 

New extension for South Kavala UGS tender most likely, investors hesitant

The government appears to have reached a decision to order yet another deadline extension for the submission of binding bids in a tender staged by privatization fund TAIPED for the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered for the development and operation of a prospective underground natural gas storage facility (UGS) for a 50-year period.

The current deadline expires today, but, according to sources, authorities fear the tender’s final-round qualifiers will not submit bids as they have complained pricing regulations established by RAE, the Regulatory Authority for Energy, do not make the investment viable.

Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna have qualified for the tender’s final-round.

 

 

South Kavala UGS tender likely to conclude without result

A deadline for the submission of binding bids in a tender staged by privatization fund TAIPED for the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered for the development and operation of a prospective underground natural gas storage facility (UGS) for a 50-year period, has been finalized for November 28, approximately two-and-a-half years after the tender was announced, energypress sources have informed.

However, the tender’s two final-round qualifiers – Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna – have complained related pricing regulations are far from making the investment viable. Subsequently, the participants will most likely not submit binding bids, sources closely following the procedure have noted.

If so, the tender will most likely be declared inconclusive, setting back the country’s plan for a domestic UGS. Its gas storage capacity would offer crucial protection for Greece against international market price volatility.

Officials representing the energy ministry, TAIPED and RAE, the Regulatory Authority for Energy, held a meeting last week on the South Kavala UGS, where a decision was reached to complete the ongoing tender as soon as possible, with the current pricing regulation intact.

The tender for the South Kavala UGS was launched by TAIPED in June, 2020.

Some investors behind CCGTs stalling, others forging ahead

Energy crisis uncertainty and the singling out of natural gas for its exorbitant price levels are factors troubling investors behind new combined cycle gas turbine (CCGT) plant projects.

Some investors have stalled their CCGT investment plans, waiting to see how developments unfold concerning gas prices and availability, while, on the other hand, more aggressive players are forging ahead.

Elpedison has yet to reach an investment decision on a new 860-MW CCGT at the company’s Thessaloniki refinery facilities. Despite having begun some preliminary work, Elpedison’s partners – HELLENiQ ENERGY, until recently named Hellenic Petroleum (ELPE), and Edison – have put their Thessaloniki CCGT project on hold to appraise international and European energy market developments.

If developed, Elpedison’s prospective 860-MW Thessaloniki facility would add to the joint venture’s two existing facilities. The HELLENiQ ENERGY petroleum group is also planning an FSRU at the Thermaic Gulf, which would establish a Thessaloniki hub for the company.

The Copelouzos group has also been troubled by the adverse market conditions. Group member Damco Energy had secured a license for an 840-MW CCGT in Alexandroupoli, northern Greece, but the high cost of natural gas and overall market uncertainty prompted the company to not go it alone and seek partners for the project.

According to sources, power utility PPC and gas company DEPA Commercial have joined Damco Energy for the Alexandroupoli CCGT. Official announcements on the partnership are expected soon.

Elsewhere, the GEK TERNA and Motor Oil groups have begun working on an 877-MW CCGT in Komotini, northeastern Greece. The former, in its publication of first-half results, noted work on the “Thermoilektriki Komotinis” project is continuing, its scheduled launch unchanged for 2024.

 

 

 

 

 

Clarity on Larco, South Kavala UGS privatizations by end of July

The fates of two long-running privatizations, state-controlled nickel producer Larco and the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered through a tender for the development and operation of a prospective underground natural gas storage facility (UGS), are expected to be cleared up by the end of July, privatization fund TAIPED’s chief executive Dimitris Politis has informed.

Also, the completion of gas company DEPA Infrastructure’s sale to Italian company Italgas is expected by September, along with new sale alternatives for the DEPA Commercial sale, whose initial procedure was officially terminated in May as a result of complications stemming from an ongoing legal battle between the company and fertilizer producer ELFE, the TAIPED official noted.

The “South Kavala” UGS tender’s final round has been held up as a result of objections raised by participants over project pricing regulations established by RAE, the Regulatory Authority for Energy. These regulations are expected to soon be published in the government gazette.

Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna are the final-round qualifiers of the “South Kavala” UGS tender.

Larco sale participants have been set a July 29 deadline for binding bids, Politis, the TAIPED chief, informed.

As for the DEPA Infrastructure sale procedure, hurdles have been removed as a result of revisions separating certification requirements set by RAE, the Regulatory Authority for Energy, for the gas company’s distribution subsidiaries from the DEPA Infrastructure sale.

Alternative plans for the ill-fated DEPA Commercial sale, including a possible partial privatization, will be announced by September or October, the TAIPED chief informed.

TAIPED, Kavala UGS bidders call for greater user funding

Greece’s privatization fund TAIPED and the final-round bidders in a tender offering the development and operation of a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north have called for an increase of the project’s funding by energy network users to a degree of as much as 100 percent, from a level of 50 percent proposed by RAE, the Regulatory Authority for Energy.

This call for the project’s greater funding percentage by energy network users was expressed by TAIPED and the sale’s two candidates – Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna – during consultation staged by RAE.

The project’s increased funding percentage by energy network users would ensure its sustainability, while, on the contrary, the risk level would be high, the tender’s final-round qualifiers noted.

RAE’s consultation covered the UGS project’s pricing framework and DESFA’s ten-year development plan from 2022 to 2031.

 

Kavala UGS binding offers in July, pricing rules unchanged

RAE, the Regulatory Authority for Energy, has left unchanged, following consultation, a pricing framework for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, a step enabling the project’s binding-bids stage to go ahead, energypress sources have informed.

According to the tender’s latest schedule, included in a European Commission report published yesterday, binding bids will be submitted towards the end of July, while, in the lead-up, the two bidding teams, a consortium comprising gas grid operator DESFA and GEK TERNA, and rival bidder Energean, will be updated on the license’s details.

The tender is expected to be completed towards the end of October.

According to the project’s pricing framework, 50 percent of the UGS facility’s development cost, budgeted at 314 million euros, will be guaranteed through regulated earnings.

The project’s operator will need to retrieve the remainder either from the Greek State, on the grounds of strategic reserve maintenance, or from other users of the facility.

 

RAE to propose 50% consumer coverage of Kavala UGS cost

RAE, the Regulatory Authority for Energy, will propose that consumer surcharges cover 50 percent of the total development cost of a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, sources have informed.

The authority is expected to include the UGS project on the agenda of its board meeting tomorrow and may forward, for consultation, its pricing policy and project funding proposal on Friday.

According to the same sources, the RAE plan includes a 35 percent cost-coverage proposal for the UGS project through EU funds or other support mechanisms – the Kavala project is on the EU’s PCI list, enabling EU funding – and 15 percent coverage by the investor.

The energy ministry appears to agree with RAE’s proposal for consumers to cover 50 percent of the UGS project’s cost through surcharges.

The need for strategic gas reserves has been further highlighted by the current energy crisis.

A pending regulatory framework from RAE is expected to soon be finalized, which would enable privatization fund TAIPED to move ahead with its next steps in the UGS’s tender. The procedure has remained stagnant for months.

The tender’s two final-round qualifiers, GEK TERNA – DESFA (Greek gas grid operator) and Energean, still need to submit binding offers. Should no other obstacles arise, the two qualifiers are likely to have submitted their binding offers within the next three months.

RAE close to decision on Kavala UGS pricing regulations

RAE, the Regulatory Authority for Energy, is preparing to decide on business pricing regulations for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, a step that would pave the way for the second round of binding offers in an ongoing privatization offering contracts for the development and operation of the facility.

The facility’s pricing regulations are scheduled to be discussed at a RAE board meeting this Thursday, sources informed.

The authority may opt to not take a final decision on the pricing regulations during this session and instead announce a preceding public consultation procedure of brief duration, between one and two weeks, to take into account the resulting feedback and then decide on the pricing regulation details, the sources added.

A gas grid operator DESFA and GEK TERNA partnership, as well as Energean Oil & Gas have advanced to the second round of the project’s tender staged by privatization fund TAIPED.

According to a previous RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

Gas network upgrade cost in north crucial for UGS sustainability

The cost of reinforcing the gas network in northern Greece, a key component to the financial sustainability of a project entailing the development of an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, has been discussed at an energy ministry meeting involving officials of RAE, the Regulatory Authority of Energy, gas grid operator DESFA and the privatization fund TAIPED.

Officials are seeking full clarity on the level of investments needed for the gas network in northern Greece so that natural gas can be transported to and from the prospective UGS.

According to DESFA, the country’s gas grid operator, northern Greece’s gas network now requires an upgrade as the prospect of a UGS facility was completely unanticipated when the region’s grid was initially designed and developed.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by TAIPED.

Late November biding-bid tender deadlines for Larco privatization

Officials intend to set late November binding-bid deadlines to two tenders concerning the privatization of financially pressured state-controlled nickel producer Larco, a delayed procedure whose completion was initially planned for the first half of this year.

The deadline dates for the two tenders will be set within days of each other, government sources have informed.

Greek officials are pushing ahead with the privatization procedure following pressure from the European Commission, which has informed that the sale needs to be completed soon if the government is to avoid hefty penalties for illegal state aid offered to the nickel producer.

Also, officials appear to have decided to dismiss the nickel producer’s 1,100 or so workers, according to the sources, while the labor ministry is currently looking for fund support to cover their compensation packages.

The privatization’s first of two tenders concerns the transfer of mines in Evia, Fthiotida, Viotia (Agios Ioannis area) and Kastoria, ore stocks, by-products and recyclable materials as well as plots of rural land.

The second tender concerns the privatization of the Larymna smelting plant, the Larymna and Loutsi mines and relevant mining rights and other assets owned by the Greek State and currently leased to Larco.

Three of six initial candidates remain in the running – GEK TERNA, MYTILINEOS and COMMODITY & MINING INSIGHT IRELAND LIMITED.

Network users to cover 50% of South Kavala UGS project cost

RAE, the Regulatory Authority for Energy, has approved guidelines specifying how the development cost will be shared for an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, thereby settling one of the main regulatory issues that remained for an ongoing tender offering use, development and operation of the facility.

According to the RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

In the event that the UGS is excluded from the EU’s PCI list, the Greek State will consider becoming a project partner so that the cost for gas network users is not increased.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by privatization fund TAIPED.

The almost depleted natural gas field, where the UGS will be developed, is located 18 km south of the main coastline of Kavala, roughly 6 km west of the island Thasos, at a sea depth of 52 meters.

Mytilineos begins work on PPC Renewables 200-MW solar farm

The Mytilineos group’s Renewables & Storage Development Business Unit (RSD) has begun work on the development of a 200-MW solar farm in Kozani, northern Greece for PPC Renewables, a power utility PPC subsidiary.

The project will be added to two smaller solar PPC Renewables farms, each offering a capacity of 15 MW, which have already been completed by their respective developers, Mytilineos and GEK TERNA, for an overall capacity of 230 MW, Greece’s biggest solar energy facility under construction at present.

Mytilineos was declared preferred bidder last December in a tender staged by PPC Renewables. Parliamentary approval of the agreement in April paved the way for the contract’s finalization and commencement of work.

Mytilineos has been tasked with the design, installation and delivery of the solar farm, as well as its connection with two 150kV-cpaacity substations.

The project’s development cost was reduced to 83.7 million euros through the tender, down roughly 30 percent from an initial budget of 110 million euros, taking the facility’s energy production cost to 42,000 euros per MW, one of the most competitive rates in Europe.

The solar farm, to occupy approximately 500 hectares, will be comprised of bifacial panels with single-axis trackers. The RES facility will have an annual production capacity of 352 GWh, capable of covering the needs of approximately 75,000 households.

PPC Renewables, at a RES auction, has secured a tariff of 49.11 euros per MWh for the project’s output.

The project’s delivery has been given a 42-month period. PPC Renewables is striving to increase its installed RES capacity to 500 MW by the end of 2022.

 

Mid-October bidding deadline for assets leased to Larco

Privatization fund TAIPED will, according to sources, set a mid-October deadline for binding bids concerning the privatization of the Larymna smelting plant, the Larymna and Loutsi mines and relevant mining rights and other assets owned by the Hellenic Republic and currently leased to “LARCO General Metallurgical & Mining Company S.A.” (LARCO).

Six interested parties are participant in the tender. These are:

  1. COMMODITY & MINING INSIGHT IRELAND LIMITED
  2. GEK TERNA S.A. – AD HOLDINGS AG
  3. MYTILINEOS S.A.
  4. SOLWAY INVESTMENT GROUP LIMITED
  5. THARISA PLC
  6. TRAFIGURA GROUP Pte Ltd

GEK TERNA building vertically integrated energy group

Listed GEK TERNA construction and energy group has further reinforced its position in the energy market following its acquisition of stakes held by Engie and Qatar Petroleum in the Heron energy group.

As a result, GEK TERNA has now gained control of Heron’s energy production and supply activities.

The group’s objectives for an increased installed capacity in RES and conventional electricity generation promise to make GEK TERNA the country’s second biggest energy group, following PPC, the power utility.

Group member Terna Energy aims to increase its installed RES capacity to 3 GW by 2025, while, during the same period, or possibly one year earlier, the group intends to boost its conventional energy production capacity to 1.5 GW.

Heron is equipped with two gas-fueled power stations offering a total capacity of 600 MW, while the company has also announced it will co-develop an 877-MW power station in Komotini, northern Greece, with Motor Oil.

The GEK Terna group, with its subsidiaries Terna Energy in renewable energy, and Heron, for conventional energy production and supply, has created a 4.5-GW portfolio capable of providing electricity products through decarbonized operations.

The listed group has taken a big step into the new era of energy supply through power and purchase agreements (PPAs) as Heron will be able to offer major-scale energy consumers bilateral supply contracts for green and conventional energy.

Damco Energy CCGT boost to 840 MW approved by RAE

A plan by Damco Energy, a Copelouzos group subsidiary, to increase the capacity of its prospective natural gas-fired power station in Alexandroupoli, northeastern Greece, from 662 MW to 840 MW has been approved by RAE, the Regulatory Authority for Energy.

The energy company now needs to make an investment decision, expected within the summer, before work on the project commences, sources informed. Its licensing procedure has been completed.

According to the sources, ESM, North Macedonia’s state electricity company, set to acquire a 25 percent in the Alexandroupoli natural gas-fired power station, is now at the final of its preparations and is currently performing due diligence.

Damco Energy is one of a number of companies that have not only decided to develop natural gas-fired power stations but also to boost capacities of their respective projects to over 800 MW.

Mytilineos was the first to do so with its plan for an 826-MW combined cycle gas turbine (CCGT unit) in Agios Nikolaos, Viotia, northwest of Athens, a project already being developed.

Following suit, Elpedison upgraded a licensed natural gas-fired power station plan in Thessaloniki to 826 MW, while, just weeks ago, GEK Terna and Motor Oil also announced an upgrade for their natural gas-fired power station in Komotini, northeastern Greece, a joint venture, to 877 MW.

Power utility PPC has also announced a plan to convert its new lignite-fired power station, Ptolemaida V, to a natural gas unit, planned to ultimately offer a capacity of over 1,000 MW by 2025.

The prospective natural gas-fired power stations, totaling 4.3 GW, are planned to fill the capacity gap that will be left by PPC’s withdrawal of lignite-fired power stations, exiting as part of the country’s decarbonization effort.

These new gas-fired units are also expected to export electricity to Balkan countries through grid interconnections with neighboring markets.

Vertical integration, diversification, FSRU behind MOH Komotini plant role

Petroleum group Motor Oil Hellas’ intent to further bolster its position in the electricity market is highlighted by its decision to participate, with a 50 percent stake, in a new natural gas-fired power station being jointly developed with GEK Terna in Komotini, northeastern Greece.

More specifically, MOH’s involvement in this project can be linked to three key strategic reasons: vertical integration; market diversification beyond the refining sector; and the market role of the group’s planned FSRU in Korinthos, the Dioryga Gas project.

MOH’s participation in the Komotini natural gas-fired power station, coming as an addition to another such unit, Korinthos Power, in which the petroleum group holds a 35 percent stake, is expected to further bolster its vertical integration in the electricity market.

MOH, in the retail electricity market, is represented by supplier NRG, a company displaying dynamic growth with market share gains.

The group’s acquisition of a 50 percent stake in the Komotini power plant, to offer an 877-MW capacity, will boost its presence in electricity production and creates further opportunities for trade synergies.

The group’s Dioryga Gas project in Korinthos promises to supply large LNG quantities to the Komotini power station.

According to some sources, MOH is also discussing a possible entry, as a stakeholder, into other natural gas-fired power stations that are currently being developed, so that these, too, may be supplied with LNG by the group.

IPTO factors Balkans into adequacy report calculations

IPTO is taking into account current and potential grid capacities of neighboring Balkan markets for its preparation of an updated adequacy report, a study to serve as a base for various new plans, including the shaping of Greece’s requests for a Capacity Remuneration Mechanism (CRM) and Strategic Reserve, an updated National Energy and Climate Plan (NECP), and private-sector investment decisions for new natural gas-fired power stations.

IPTO is also factoring into its adequacy report calculations the heightened investment interest and activity in Greece’s RES sector, energy storage, now that this domain appears set for initiation, as well as the introduction of new elements to mechanisms and energy exchange markets, including the demand response system, remunerating major-scale electricity consumers when the operator asks them to shift their energy usage or stop consumption during high-demand peak hours, so as to balance the electricity system’s needs.

Electricity grids in the Balkans are being revamped, creating unprecedented electricity export opportunities for Greek exporters. The EU’s intention to impose a carbon border tax on electricity imports from non-EU countries adds to Greece’s export potential to the Balkans, as well as more new natural gas-fired power stations than the quantity included in the current NECP.

Given the developments, Greece now probably needs four new natural gas-fired power stations, including power utility PPC’s Ptolemaida V.

Private-sector firms are pushing ahead their plans for the development of such units, as was highlighted by a related joint announcement last Friday from GEK Terna and Motor Oil.

 

Desfa-Gek Terna, Energean to S. Kavala UGS tender 2nd rnd

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second-round, binding-offers stage of a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”, while China’s CMEC-MAISON GROUP failed to qualify, privatization fund TAIPED has announced in a statement.

Following the signing of confidentiality agreements, the two qualifiers will be granted access to the tender’s virtual data room, where financial and technical data will be uploaded for due diligence procedures.

However, much work lies ahead before this project matures to enable the submission of binding offers. A number of regulatory issues remain pending, officials monitoring developments have informed, describing the project as complex and highly technical.

Pending issues include determining the percentage of the UGS’s capacity to be regulated for pre-determined earnings, and the percentage of capacity whose earnings will be shaped by market forces. The regulatory period and WACC level also need to be decided and set.

Given these tasks, as well as obstacles raised by the pandemic, binding offers are not expected to be submitted any sooner than late-2021. The final stage of this tender appears most likely to take place early in 2022.

Appraisal of initial bids for Larymna assets lease contract by April

Privatization fund TAIPED and a supporting body are expected to complete, by early April, their appraisal of non-binding expressions of interest submitted to a tender by six investors for the lease of the Larymna smelting plant, Larymna and Loutsi mines, and relevant mining rights and other assets, all belonging to the Greek State and currently leased to troubled nickel producer Larco.

Expressions of Interest were submitted by the following Interested Parties (in alphabetical order):

  1. COMMODITY & MINING INSIGHT IRELAND LIMITED
  2. GEK TERNA S.A. – AD HOLDINGS AG
  3. MYTILINEOS S.A.
  4. SOLWAY INVESTMENT GROUP LIMITED
  5. THARISA PLC
  6. TRAFIGURA GROUP Pte Ltd

The six bids are currently being examined by the country’s foreign and defense ministries for any possible national security issues, sources closely monitoring the overall procedure have informed.

Once past this stage, the supporting documents accompanying the six non-binding offers will be examined by TAIPED and its supporting body.

Qualifiers making the tender’s second round will be given access to a video data room containing technical and financial data on Larco.

South Kavala UGS qualifiers in March, plenty of work needed

Privatization fund TAIPED is expected to have completed its appraisal of first-round bids in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece next month, possibly within the first half of March, energypress sources have informed.

The fund, at that point, will be ready to announce its list of second-round qualifiers.

TAIPED and the government are taking cautious steps for this project, regarded as complex, especially on matters concerning the tender’s binding-offers stage, sources informed.

Three bidding teams have submitted non-binding expressions of interest for the first round. These are: China Machinery Engineering Co. Ltd. (CMEC) – Maison Group; DESFA – GEK Terna; and Energean Oil & Gas (in alphabetical order).

Much work appears to still lie ahead for this privatization, whose completion is not expected any sooner than next autumn, sources noted.

Pending matters include the delivery of a finalized operating framework for the South Kavala UGS by RAE, the Regulatory Authority for Energy.

This framework will determine the pricing system for the UGS, or the proportion of the facility’s earnings to be regulated and the proportion to be shaped through competitive procedures.

Besides RAE’s operating framework, bidders will also need to conduct due diligence before submitting second-round offers.

 

 

EBRD: Green projects in Greece a priority, RES-based economic recovery

The European Bank for Reconstruction and Development (EBRD) is strongly interested in Greek energy market investments, Andreea Moraru, the bank’s head of Greece and Cyprus, has stressed in an interview with energypress.

The EBRD official spoke extensively on significant investment opportunities being created by the energy transition.

Since 2015, the EBRD has invested over four billion euros in Greece, participating in numerous major projects, Moraru informed, noting its recent support for power utility PPC, an investment worth 160 million euros, one of the bank’s largest, to cover customer payment volatility following the outbreak of the pandemic, exemplifies EBRD’s strong support for Greece.

The full interview follows:

What is the role of the EBRD compared to that of other banking institutions? 

The EBRD is a development bank committed to furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative. Our role is to be complementary to the commercial banks, to work alongside them and to support them.

Αdditionality is among the founding principles underlying our work and the particular support and contribution that the EBRD brings to an investment project which is not available from commercial sources of finance. Alongside transition and sound Banking, it is one of the three founding principles underlying our work. By ensuring that we are additional in everything we do, we ensure that our support for the private sector makes a contribution beyond that available on the market and does not crowd out other private sector actors.

Whenever we consider financing a project, we analyze whether similar financing can be obtained from private sector local banks or non-banking institutions.

Many of our markets are relatively high risk, and the private sector will only lend for short periods of time or at such high rates as to make the project unfeasible. For major new projects in the field of infrastructure, for example, longer-term financing may not be available on reasonable terms or conditions. This is where the EBRD fits in.

Additionality can also be non-financial in nature, where EBRD’s interventions contribute to better project outcomes that would not have been required or offered by commercial financiers. This can include the provision of comfort to clients and investors by mitigating non-financial risks, such as country, regulatory, project, economic cycle or political risks. Additionality may also be derived from the EBRD’s involvement in helping projects and clients achieve higher standards than would have been required by the market, such as through sharing its expertise on better corporate governance or above ‘business as usual’ environmental or inclusion standards.

Do you consider the energy sector in Greece to be suitable to contribute to the development and reconstruction of the Greek economy? For what reasons?

Absolutely. In general, the EBRD’s vision for the energy sector is of a partnership between industry, governments and consumers that delivers the essential energy needs of societies and economies in a manner that is sustainable, reliable and at the lowest possible cost.

In Greece the energy sector is embarking upon its biggest transformation yet, moving away from its reliance on lignite (c. 20% of total electricity production in 2019) to renewables and a smaller fleet of significantly less carbon intensive gas generating units. The NECP aims to achieve reduction in greenhouse gas (GHG) emissions by more than 55% by 2030 compared to 2005, planned to be achieved through: (i) decommissioning of all 4 GW of lignite-fired generation capacity by 2028 (3.4GW by 2023), (ii) 8.7 GW of new renewable generation capacity to added by 2030, reaching a total of 19 GW, and (iii) 2 GW of new gas generation capacity added for system support and security. The country remains committed to implementing the NECP as planned despite the negative impacts the CV19 crisis is expected to have on the Greek economy in 2020 and beyond.

Greece’s withdrawal from coal is a fundamental transformation that will create substantial sector and social challenges with the following broad implications: (1) constructing large volumes of low carbon generating capacity in order to ensure energy security in an increasing electrified economy, (2) reengineering the country’s transmission and distribution networks to reflect the additional penetration of distributed, intermittent renewable energy, and (3) addressing the social and economic impacts of the closure of a major part of its existing energy infrastructure, i.e. ensuring a just and inclusive transition.

We have supported many energy projects so far, especially renewables, working together with leading companies, such as GEK Terna, Mytilineos and HELPE among others.

A recent milestone is our support for the largest renewable energy project in Greece and the largest solar energy project in south-eastern Europe to date, the new solar park in Kozani. In 2017, we also approved a framework committing up to €300 million to finance renewable energy investments in the country.

The main reasons why this sector is important for the development of the Greek economy and thus our participation, is first to help the decarbonization of the country and the transition to a greener economy, as well as to strengthen local linkages and regional integration.

What is the EBRD’S philosophy about its presence in the Greek economy and especially in the energy sector?

In Greece in particular, supporting sustainable energy and infrastructure is among our top priorities. In fact supporting sustainable energy and infrastructure is one of the pillars of the newly approved country strategy. Our investment strategy in the energy sector going forward will aim at further liberalization and diversification of the energy market focusing on renewables and increased renewable energy capacity and a more diversified energy mix to promote decarbonization of the economy. EBRD could support a second phase of feasible renewable energy projects with project preparation / technical assistance and financing (biomass and biogas plants, use of waste heat in greenhouses for high value-added agriculture, electricity storage facilities, green hydrogen production plants and other forms of energy storage.

We see that it’s challenging to meet EU climate goals in Greece and our goal is to support the country with that. Our approach and philosophy is in line with the National Energy and Climate Plan and we are very glad the Greek government is committed to close all lignite plants. We need to keep this momentum, despite the current Covid-19 crisis, and turn the country greener.

One good example is our recent support for PPC (DEI). This has been one of our largest investments (€160 million) and the first time we supported the public sector in Greece. This facility supports PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It also strengthens the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonization.

What are the characteristics of private companies that could apply to be supported by the EBRD?

When we consider financing a project we analyze different aspects, such as how it supports the green economy, if it promotes women or youth inclusion, if it can enhance the competitiveness and resilience of the Greek economy etc. We look at the financial strength of the project as we operate according to sound banking principles. We cannot finance companies in certain sectors like defence-related activities, tobacco, substances banned by international law or gambling facilities.  As I have already mentioned, we also need to be additional.

We work in a wide range of sectors, from energy, infrastructure, manufacturing, property, tourism, agriculture to trade and financial institutions. We also support SMEs with business advice, know-how transfer and trainings.

What are your conclusions from your cooperation so far with Greek companies and institutions?

We’re very proud of all our projects in Greece so far. Since commencing our operations in 2015, the Bank has invested more than €4 billion in the country, helping respond to the financial crisis. Against a turbulent political and economic backdrop, the EBRD helped stabilize the financial sector, support private companies through export-oriented growth and lay the foundations for greater private sector participation in critical energy and infrastructure projects that have also strengthened regional integration.

We faced several challenges because of the financial crisis, but this was expected and was exactly the reason why we came to the country. Our main conclusion is that Greek companies have strong potential and very talented workforce, who we’re glad to be working with. The COVID-19 pandemic has abruptly interrupted Greece’s steady recovery, but we’re confident that the country can build back better.

We have an excellent cooperation with the Greek Government whom we are supporting on a number of initiatives.  In late 2020, the EBRD joined forces with the Ministry of Development and Investments of Greece to establish a new public-private partnership (PPP) preparation facility cooperation account, following a request from the Greek authorities. We are also working close with the Ministry of Finance on development of a capital market strategy, a project supported by DG Reform.

What are your plans for the new year?

We will focus on supporting the recovery of the Greek economy, by helping with the immediate needs of the Greek businesses because of coronavirus, as well as with their long-term growth plans. Green projects, including in the energy sector, will be our priority, but we’ll also be active in other sectors. We’ll continue supporting the banking sector, too.

Do you consider the investment risk in our country increased after the great economic crisis and in the light of the current crisis due to a pandemic?

The financial crisis had a strong impact on Greece, but we recognize that the Greek economy had started recovering and growing in the recent years. It’s true that COVID-19 containment measures are likely to depress economic output and cause particular disruption to the tourism industry, reversing the economic recovery and hindering investments in the near term, not only in Greece, but also in most countries. There are still many things that need to be improved in the country to attract more investors, but we don’t consider the investment risk much higher than it used to be. The Greek economy can recover after the pandemic.

 

EBRD reports close to €800 million investment in Greece in 2020

The European Bank for Reconstruction and Development (EBRD) stepped up its investments in Greece in 2020 to address immediate needs caused by the coronavirus pandemic and to create the foundations for a recovery with a focus on building back better economies.

Continuing its support for the Greek economy in 2020, the Bank made €797 million new investments in 17 projects, compared to €571 million in 13 projects in 2019, putting Greece in the EBRD’s top five countries of investment last year. 

Andreea Moraru, EBRD Director for Greece, said: “We are very proud to contribute to the robust response of the Greek economy to the crisis, supporting the recovery, helping local businesses with their needs and facilitating the transition to greener economic activities.” 

The Bank provided a senior unsecured loan of up to €160 million power utility PPC. The facility will support PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It will also strengthen the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonization. 

The EBRD also stepped up its efforts to help the Greek private sector by investing €57.5 euros in GEK TERNA’s successful issuance of a seven-year €500 million bond. GEK TERNA S.A. is the holding company for a group active in concessions, renewable energy, thermal energy and construction, incorporated in Greece. 

This issuance was the largest bond transaction to be listed to date on the Athens Stock Exchange and the first corporate issuance in the country since the outbreak of the pandemic. The proceeds will be used to refinance secured commercial loans with longer tenors and reduced financing costs, enabling a corporate transformation that will optimize the capital structure of GEK TERNA. 

Facilitating the transition from fossil fuels to renewable sources of energy, EBRD launched its just transition initiative linking the transition to a low-carbon economy with inclusive economic development. One of the first projects under this approach was the Bank’s €75 million investment in the successful Eurobond tap issuance by Hellenic Petroleum (ELPE), in support of a new solar photovoltaic plant in Greece, the largest solar energy project in south-eastern Europe to date. 

The total funds of €100 million raised will enable ELPE to finance the construction of 18 solar photovoltaic (PV) plants with a total installed capacity of 204 MW in Kozani, western Macedonia, the country’s most coal-dependent region. The solar park will be built close to existing coal-fired power plants that are being phased out and is expected to reduce CO2 emissions by 320,000 tons annually.

In addition, the EBRD invested €50 million in the first senior preferred (SP) green bond issuance by the National Bank of Greece (NBG), combining support for capital market development and for the green economy in Greece. It was the first green bond issuance by a Greek bank and the first SP instrument to be issued by a Greek financial institution. 

Together with other investors, the EBRD invested in a €186.4 million securitization transaction of automotive leases, originated by Olympic Commercial and Tourist Enterprises S.A. (Avis), the leading car leasing company in Greece and master franchisee of the global car rental company Avis Budget Group.  

The transaction was an important milestone for the Greek securitization market as it was the largest issuance by a non-bank originator and the first auto lease asset-backed security transaction in the country with a sustainable and green element. 

Part of the proceeds will be used by Avis for the replacement of its existing fleet with lower CO2 emissions, electric and hybrid vehicles, helping the company to reduce its diesel footprint.

In late 2020, the EBRD joined forces with the Ministry of Development and Investments of Greece to establish a new public-private partnership (PPP) preparation facility cooperation account, following a request from the Greek authorities. 

The EBRD will manage the facility, which will provide high-quality, client-oriented project preparation, training and advisory services, policy support and institutional strengthening activities related to the infrastructure sector in Greece. The Ministry will fund the activities of the facility with €20 million. The project pipeline will mostly be in the social infrastructure sector (education and health), sustainable urban infrastructure, and water and waste management.

Keeping vital trade flows going, the Bank provided a €20 million factoring facility to ABC Factors under its Trade Facilitation Program (TTP). Building on the EBRD’s cooperation with Alpha Bank, the parent company of ABC Factors, the facility will enable the factoring subsidiary to further expand its portfolio of small and medium-sized enterprises (SMEs) and local corporate clients by providing funding for domestic and international factoring transactions. Greece remains the EBRD’s most active country under TFP, with close to €320 million trade transactions in 2020.  

In 2020, the EBRD started 41 new advisory projects with Greek SMEs in various areas, such as strategic and business planning, marketing and e-commerce, operational efficiency, financial management and digitalization, and delivered five online export training seminars to more than 100 participants. Donor funding from Greece, as well as from the European Union through the European Investment Advisory Hub of the European Investment Bank, has been crucial. 

Papoutsanis, a leading Greek manufacturer of soap and liquid cosmetics, became the first Greek firm to join the EBRD’s Blue Ribbon program, which combines business advice and finance for companies that stand out for their market leadership and high-growth potential. 

Furthermore, the Board of Directors of the EBRD approved a new strategy for Greece, which will guide the bank’s investment and policy engagement in the country during the next five years. 

The EBRD responded to the coronavirus pandemic with record investment of €11 billion in 2020 through 410 projects. This represents a 10 per cent increase in annual business investment relative to 2019, when the bank provided €10.1 billion to finance 452 projects.

South Kavala UGS tender qualifiers by early February

Greece’s privatization fund TAIPED will finalize its list of second-round qualifiers in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece by late January or early February, sources have informed.

Three parties submitted first-round expressions of interest: China Machinery Engineering Co. Ltd. (CMEC) – Maison Group; DESFA – GEK Terna; and Energean Oil & Gas (in alphabetical order).

Assessments of their supporting documents and other criteria are expected to be completed within the next twenty days.

RAE, the Regulatory Authority for Energy, still needs to deliver decisions concerning the operating framework of the UGS.

These pending issues include a RAE decision on the percentage of the UGS project’s capacity to be regulated, thus pre-determining this proportion’s revenue, and the earnings percentage to be determined by market forces.

The authority also needs to decide on the duration of the regulatory period and its WACC level.

Three bidders express first-round interest in South Kavala UGS tender

Τhree interested parties have submitted expressions of interest to a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece, The Hellenic Republic Asset Development Fund (HRADF S.A.) has announced in a statement.

Expressions of Interest were submitted by the following parties, in alphabetical order:

  • CHINA MACHINERY ENGINEERING CO. LTD. (CMEC) – MAISON GROUP
  • DESFA – GEK TERNA
  • ENERGEAN OIL & GAS

HRADF’s advisors will evaluate the aforementioned expressions of interest and submit to the fund’s Board of Directors their recommendation regarding the candidates that qualify for the next phase of the tender (binding offers phase).

The almost depleted natural gas field “South Kavala” is located in the southwestern part of the Prinos-Kavala basin, in 52 meters of water depth in the North Aegean Sea, about 6 km off the west coast of Thassos.

The duration of the concession agreement will be up to 50 years following the licensing of the UGS in South Kavala. The conversion of the natural gas field “South Kavala” into a UGS will be carried out by the concessionaire within a binding period to be determined in the concession agreement.

The UGS South Kavala is intended to serve as energy infrastructure that will enhance the security of supply in the Greek market as well as in Southeastern Europe, ensuring gas supply to end users and facilitating security-of-supply obligations of power producers and natural gas suppliers.

Storengy’s Kavala UGS tender exit prompts formation changes

A decision by France’s Storengy (Engie) to not participate in a forthcoming tender offering an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north has prompted a domino effect of formation changes by groups of investors planning to bid.

GEK TERNA appears to have formed an association with gas grid operator DESFA for the tender after having previously agreed to join forces with Energean Oil & Gas and Storengy.

Energean Oil & Gas, holding a license for the virtually depleted South Kavala field, has not remained an onlooker. The company has also found a partner, believed to be domestic, from the construction sector, according to sources.

To date, Energean Oil & Gas has held talks with three major groups, Mytilineos, AVAX and Aktor, the same sources added.

A Chinese investor is also believed to be interested in the South Kavala UGS tender, staged by privatization fund TAIPED, but will not link up with any partners.

The tender is offering rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Participants must submit first-round, non-binding offers by October 19 following three deadline extensions.

South Kavala UGS bidders talk formations as deadline nears

Prospective bidders of an upcoming tender to offer an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north are deliberating over possible partnerships as the October 19 deadline for official expressions of interest approaches.

Greek gas grid operator DESFA, Energean Oil & Gas and GEK TERNA will participate in the tender, according to enegypress sources, while some market officials believe a Chinese company, not yet revealed, is also interested.

All three Greek companies have remained tight-lipped on possible partnership formations for the tender. GEK TERNA and Energean Oil & Gas are believed to be discussing the prospect of teaming up, while DESFA and the Chinese company will most likely enter the tender alone, energypress sources informed.

The tender, staged by privatization fund TAIPED, will offer rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Investments needed for the project’s development are estimated between 300 and 400 million euros.

The field is located approximately 6 kilometers from the west coast of the island Thasos, in the North Aegean Sea, at a depth of 52 meters.

Its development into a UGS facility promises to contribute to Greece’s energy security and that of southeast Europe.