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Caspian Energy Journal Caspian European Club
Wednesday, 19 August 2015 17:00

Greece's grid privatization sell-off could go cheap

The privatization bid of Greece's national electricity transmission operator may not receive "fair value" due to the economic limbo that burdens the country, Kostas Theodoropoulos, a senior consultant at U.K.-based Poyry Management Consulting, said Monday, Caspian Energy News (www.caspianenergy.net) reports with reference to Anadolu Agency.

The Greek government had struck a deal with its lenders, which was ratified by the Greek parliament last Friday. The three-year €86 billion bailout forces the country to privatize some of its important assets including its transmission grid, regional airports and ports.

"Given the economic and political uncertainty, some investors may be less inclined to express interest in a potential acquisition of ADMIE (Greek acronym for Independent Power Transmission operator)," Kostas Theodoropoulos, a senior consultant at U.K.-based Poyry Management Consulting, said.

"This may lead to poor participation in the tender process and not allow for a fair value of the asset to be realized," he added.

Theodoropoulos noted that the Public Power Corporation (PPC), the state body that owns ADMIE, had put a €900 million price tag to privatize the grid at the beginning of last year, however the bid was stalled due to the then new Syriza left wing government's reluctance to sell off state assets at the time. The consultant says this also might discourage potential bidders.

Despite the potentially cheap sell-off, the privatization process could benefit the development of major projects including the potential connection transmission of the Crete island to the mainland as it might ease the way to access finance, Theodoropoulos said.

The agreed privatization process is also expected to take place by October this year when the withdrawal of the PPC's authority is due to be enforced. 

If an agreement with lenders cannot be reached, a second plan will be suggested to sell off a major share of ADMIE, before the end of October, according to an energy official, who asked to be unnamed.

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