Three firms expected to make IPTO tender’s second round

Three of four companies that had submitted non-binding expressions of interest for a 24 percent share of IPTO, the power grid operator, are expected to qualify for the international tender’s next stage, entailing binding bids, according to energypress sources.

Sources informed that Italy’s Terna, France’s RTE, an EdF subsidiary, and China’s State Grid of China Corporation (SGCC) will be selected today by the board at main power utility PPC, IPTO’s parent company, following an assessment of their technical and economic credentials. The fourth bidder, China Southern Power Grid, will not advance to the tender’s next stage, sources said, as, unlike fellow Chinese company SGCC, it does not hold a stake in any European electricity transmission operator. Bidders need to be certified European operators or maintain a corporate association with a European operator.

The effort to split IPTO from PPC – besides the 24 percent share being offered to strategic investors, the plan also entails a 51 percent transfer of the operator to the Greek State and a 25 percent stake to investors though the bourse – represents the first step in a series of major bailout-required electricity market reforms to be implemented in the coming months. These measures are expected to further liberalize the market and reduce PPC’s dominant market share to less than 50 percent by 2020.

Other steps include the imminent introduction of NOME auctions, to provide third parties with access to PPC’s low-cost lignite and hydropower sources, and imposing surcharges on electricity suppliers to help cover the deficit-ridden renewable energy (RES) special account. As the dominant supplier at present, PPC will need to pay the greatest amounts.

Once through to the next stage, qualifiers will be invited by PPC to submit binding offers. Qualifiers will be granted access into a virtual data room providing financial details on IPTO to assist with their due diligence procedures.

The preferred bidder will need to be selected by October 31 and the agreement finalized by February 28, 2017.

Of the three bidders expected to qualify for the next stage, SGCC is considered the favorite for IPTO’s 24 percent. This assessment is based on the Chinese firm’s financial might. It possesses sufficient liquidity to easily outbid the two rival European bidders, pundits believe. Such a prospect promises to offer needed cashflow relief for PPC, burdened by an alarming level of unpaid receivables.