The government has been forced by the country’s creditors to return to a three-year-old plan for the sale of part of the production capacity of Public Power Corporation, although this time, the so-called “Small PPC” to be privatized is expected to constitute more than the 30 percent originally foreseen, and in many respects the terms will be tougher too.
The draft agreement that the creditors have proposed to the government provides for PPC to part with 40 percent of its lignite-powered and hydroelectric units starting this July and to be completed within the first half of 2018.
The particularly tight timetable provides for the determination of the objectives and the process to be agreed by July. In September, PPC will have to conduct market tests to gauge interest from domestic investors and, depending on the results, it will set the number and composition of the packages to be auctioned off in tenders.
This means that the choice of units to be sold will be down to the investors, unlike in the Small PPC plan, whereby PPC reached an agreement with the government on the package that would secure both the attraction of investor interest and the competitiveness of PPC’s remaining capacity portfolio.
Once the units to be sold off are determined, PPC will have to ask the interested parties to submit non-binding offers by November, with the deadline for binding offers to be set for February 2018. The creditors’ timetable provides for the signing of the transaction contracts by March 2018 and the full completion of the process by end-June.
Among the provisions of the draft agreement is that candidate buyers should have no ties whatsoever to the Greek state and Public Power Corporation should have nothing to do with the units to be sold off, meaning the creditors reject the option of partnerships with private investors with a minority stake in PPC.