IPTO to keep over 51% of SPV for Crete grid interconnection

Power grid operator IPTO has finalized a plan for a tender to seek strategic investors for Ariadne Interconnector, its SPV established by the operator to develop the Crete-Athens grid interconnection.

The IPTO plan is expected to be submitted to RAE, the Regulatory Authority for Energy, within the next few days for approval. This could take some time as the grid interconnection, crucial for Crete’s energy needs, will now be categorized as a national project and no longer be part of the wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, has been embroiled in a dispute with IPTO for control of the Crete-Athens segment.

Energy minister Giorgos Stathakis has set a February 28 deadline for Euroasia Interconnector to recognize IPTO’s Ariadne as the sole project promoter for the Crete-Athens segment.

Euroasia Interconnector is not expected to accept. If so, RAE, immediately following the February 28 deadline, will award the Crete-Athens project to Ariadne as a national project and a tender for strategic investors should be announced soon after.

Investors are expected to be offered less than a 49 percent stake of the Ariadne Interconnector SPV, the most likely share being 39 percent, the corresponding stake offered to Euroasia Interconnector amid the dispute.

Ariadne is expected to sign a concession agreement for the project’s development. The SPV will hand over the completed project to IPTO and then be compensated through commission fees generated by the project’s utilization.

Euroasia Interconnector is expected to react and demand either a financial sum or a percentage of the project as compensation covering project study costs and other preliminary work.

 

 

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.

IPTO plans Crete link tender for Euroasia’s neglected 39%

Greek power grid operator IPTO has announced it will stage a tender offering investors, especially European operators, a stake in Ariadne Interconnector, an SPV established by the grid operator for the development of a Crete-Athens interconnection.

The move was prompted by the neglection of a pre-emption right, for a 39 percent stake in the SPV, by Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project. Euroasia Interconnector had been set a December 31 deadline to accept the offer for 200 million euros.

IPTO and the Cypriot consortium have been embroiled in a dispute for control of the wider grid interconnection project’s Crete-Athens segment.

RAE, the Regulatory Authority for Energy, which appointed IPTO project promoter of the Crete-Athens link, required to prevent a looming energy shortage threat on Crete, will need to approve IPTO’s plan for a tender before this procedure can go ahead.

Euroasia Interconnector will now need to participate in IPTO’s prospective tender should it ultimately decide to become involved in the development of the Crete-Athens grid interconnection.

IPTO has already begun contacting European energy transmission operators, Manos Manousakis, chief executive at IPTO, informed yesterday. The Greek operator had approached Belgium’s Elia and France’s RTE in the past. A new invitation for their participation cannot be ruled out.

Euroasia Interconnector is widely expected to launch a legal challenge.

Earlier this month, the European Commissioner for Climate Action and Energy Miguel Arias Canete forwarded a letter to Greek energy minister Giorgos Stathakis informing him that RAE’s decisions have led to delays in the wider PCI project, according to Greek daily Kathimerini.

The commissioner has apparently asked Greece to decide whether the Crete-Athens grid interconnection will be developed as a PCI project, enabling EU funding advantages, or as a national project, which would eliminate the project’s promoter from the Connecting Europe Facility (CEF), a key EU funding instrument. The repercussions would spill over onto tariffs paid by consumers.