MEPSO

Balkan potential highlighted by IPTO’s interest in MEPSO

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Greek power grid operator IPTO’s interest, for some time now, to acquire North Macedonia’s grid operator MEPSO, either through a strategic agreement or a share capital increase, points to the existence of opportunities for energy infrastructure upgrades in the neighboring country as well as the growing role to be played by electricity networks and corridors in the wider region.

As the energy transition progresses, electricity networks and corridors will no longer merely serve as electricity transmission lines, but promise to gradually replace oil and gas pipelines.

Greece, at present, remains sorely absent from the wider Balkan energy-sector activity. IPTO has yet to make any big moves beyond the country’s frontiers.

Though the western Balkans are currently experiencing a green-energy boom with RES investment growth having reached double digits in some countries, regional networks are outdated and insufficient to support this robust investment interest.

Though it is vitally important for Greece to assert itself as an influential energy-sector player in the Balkans, the flow of energy from the region towards central Europe is currently being controlled by Italy.

Italy’s influence, on energy matters, over the Balkans was expanded in recent years with Montenegro as a base and Italian power grid operator in a leading role, as highlighted by its acquisition of a 22 percent stake in Montenegrin power grid operator CGES.

Identifying the pivotal energy role of the Balkans early on, Italy took a strategic decision for the development of a first route linking the western Balkans and Europe in the form of a 445-km line – 423 km of it as an underwater Adriatic Sea crossing – from Pescara, on Italy’s east coast, to Kotor, on Montenegro’s Adriatic coast.

The small Balkan country has since become a bridge of energy exchange between eastern and western Europe as this Adriatic link has interconnected Italy’s network with those of Bosnia and Herzegovina, Serbia, Kosovo, Albania, and, by extension, Bulgarian and Romania.

Italian power grid operator Terna is now examining the prospect of boosting this line’s transmission capacity from 600 MW to 1,200 MW. Giuseppina Di Foggia, CEO at Terna, recently held talks in Rome with Montenegro’s new president, Jakov Milatovic, about this project.

 

IPTO eyeing North Macedonian operator, a Balkan gateway

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Greek power grid operator IPTO is eyeing the Balkan market to reinforce its standing, and, in this context, endeavoring to acquire a stake in MEPSO, North Macedonia’s operator.

If an agreement does go ahead, a prospect that requires the active involvement of the Greek government, then the neighboring country could serve as a gateway for IPTO’s entry into the wider western Balkan region, to take on network upgrade and interconnection projects, definitely needed.

IPTO has already submitted an offer for a stake in MEPSO, either through a strategic agreement or a share capital increase, North Macedonian sources informed.

IPTO executives have, for quite some time now, been engaged in talks with North Macedonian government officials, MEPSO and the country’s regulatory authority covering energy for a stake in the operator, the sources added.

Besides strengthening IPTO’s standing, such a move – which would complement Greek power utility PPC’s takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania – promises to also bolster Greece’s geopolitical role in the Balkan region.

MEPSO also stands to benefit from an agreement with IPTO as the North Macedonian operator could make the most of the Greek operator’s stronger credit rating and gain access to EU funds for network upgrades.

 

Greek, North Macedonian operators working on gas, power links

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Greek gas grid operator DESFA and its state-controlled North Macedonian counterpart MER plan to upgrade a memorandum of cooperation signed in 2016 for the construction of a 120-kilometer gas pipeline from Thessaloniki’s Nea Mesimvria area to the northern neighbor.

Heading a Greek delegation, Prime Minister Alexis Tsipras and his North Macedonian peer Zoran Zaev have agreed to sign a series of bilateral agreements and memorandums of cooperation in Skopje today.

The project, to interconnect the Greek and North Macedonian gas transmission systems, is regarded as one of the most significant energy investments being prepared by the two countries.

It is planned to offer an annual transmission capacity of about 3 billion cubic meters and also enable an interconnection with the TAP route – to supply Azerbaijan gas to European markets via Greece – for a diversification of sources.

The DESFA-MER association promises to be further enhanced by the North Macedonian operator’s moves for gas system interconnections with Kosovo and Montenegro.

Subsequently, the Greek-North Macedonian natural gas pipeline, once constructed, promises to offer a new supply route to Balkan markets.

DESFA is preparing to stage a market test for the Greek-North Macedonian pipeline during the second half of this year, sources have informed.

Meanwhile, Greece’s power grid operator IPTO and its North Macedonian counterpart MEPSO are discussing preliminary studies intended to lead to an upgrade of electricity interconnections between the two countries.