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Lenders press Greece to sell 40% of PPC lignite units and energy producing plants

Greek Interior Minister – an Energy minister in first SYRIZA government – Panos Skourletis accused on Monday international lenders of reneging on a 2015 bailout deal by trying to force a fire-sale of its main electricity utility Public Power Corporation (PPC/DEH) to serve “domestic and foreign business interests.”

Later, a Greek newspaper later confirmed Skourletis’ claims and wrote that the lenders press Greece to sell 40% of the  lignite and hydroelectric power plants of the Public Power Corporation, starting from July, and ending in the first half of 2018.

According to Reuters, under terms of a 2015 bailout deal for Greece worth up to 86 billion euros, Public Power Corp. (PPC) is obliged to cut its dominance in the Greek market to below 50 percent by 2020.

Although it is not clearly specified in the deal, lenders want Greece to sell some of PPC’s assets. PPC, which is 51 percent owned by the state, now controls about 90 percent of the country’s retail electricity market and 60 percent of its wholesale market.

Greece last year launched power auctions to private operators as a temporary mechanism and has proposed that PPC team up with private companies to help achieve this target. But lenders doubt the effectiveness of the measure.

“What they want is that power production infrastructure of up to 40 percent – PPC’s coal-fired production- is sold. This is what they want right know, which is beyond the (2015) deal,” Interior Minister Panos Skourletis, a former energy minister, told Greek state television.

Skourletis on Monday accused the lenders pressing the country to sell-off PPC units at a very low price to serve European and domestic competitors.

“It is an assault which has set its sights on PPC’s assets to pass it on to specific European and domestic business interests at a humiliating price,” Skourletis said in an article at Efimerida Ton Syntakton daily. He added that such plan was “beyond the contours of what has been agreed” between Greece and its lenders and indicated that the government should oppose plans to “cannibalize PPC.”

In a draft of the sales plan seen by Kathimerini, the lenders’ proposal foresees:  ” the sale of 40 percent of the lignite and hydroelectric power plants of the Public Power Corporation, starting from July, and ending in the first half of 2018.”

Government officials, for their part, are doing what they can to limit the pieces of the power company in the privatization portfolio and put it off until later, the daily noted.

Differences among Athens, the EU and the IMF over how PPC will give up a big part of its shares, along with labor and fiscal issues have delayed a crucial bailout review which will unlock fresh loans for cash-strapped Greece.

Some members of Prime Minister Alexis Tsipras’s leftist ruling coalition and PPC’s power unions have strongly resisted the sale of the company’s coal-fired units.

Skourletis had fought hard to keep power grid operator ADMIE, fully-controlled by PPC, under state control, instead of selling a 66 percent stake in the grid. PPC is expected to conclude ADMIE’s spin-off later this year.

He also objected strongly the sale of a 17 percent stake in PPC, part of the country’s privatization scheme agreed with its lenders.

The Public Power Company, the second-largest producer of coal-fired electricity in the European Union, had fixed assets of 17.3 billion euros in 2015, according to its latest annual report.

Along with power units across the country, it also owns coal mines and the country’s power distribution networks to households, small and medium-sized companies and industries.

Powerful union GENOP-DEH announced that it will launch strikes against the privatization.

PS it was because of the PPC deal in the 3. bailout agreement that Panos Skourletis, a core member of left-wing SYRIZA, was transferred to another ministry.  He had early raised his objections to the sale of PPC.

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