Greece presents details of agreement on energy issues

Greek Environment and Energy ministry on Tuesday presented the details of an agreement reached with the country’s creditors on energy issues. Under the agreement, PPC will have to sell around 40 pct of its lignite units and mines in order to reduce its monopoly in this category of fuel, while Greek utilities’ arrears to PPC will be repaid in a five-year period by 2022 to avoid any significant increase in electricity rates.

The agreement envisages any possible investor/investors will not be related in any way with PPC -in order to protect competition- but investment groups can participate along with enterprises from the wider public sector. The next step (included in the prior actions) will be to submit all necessary data to DG Competition of the European Commission and to finalize/vote measures, after completion of a market test, by November 2017. Implementation of the measures is expected to begin by June 2018.

The agreement envisages that lignite and hydroelectric energy auctions (NOME) will envisage an increase in auctioned quantities but at much lower levels from initial demands by the creditors. The institutions demanded auctions of up to 46 pct more quantities, but an agreement envisages significantly lower levels (16 pct in 2017, 19 pct in 2018 and 22 pct in 2019).

The Greek government must immediately submit to the institutions a road map for the adjustment of the domestic electricity market to the rules of an unified European market, in the framework of Target Model.

In the natural gas market, Greece will also has to submit by September 2017 a road map for the completion of liberalizing the domestic market and to sell a process for the sale of a 66 pct of DESFA. Under the agreement reached, the potential investor must be a European operator. Hellenic Republic Asset Development Fund (HRADF) is currently seeking to hire an advisor in the privatization of DESFA.