The national utility can pay off debts with the windfall from selling off almost half the electric grid to a private company.
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The Spear WTE Investments Sarl business owned by Australian investment banking giant Macquarie will pay €2.12 billion for a 49% share in Greek electric grid company Hedno (the Hellenic Electricity Distribution Network Operator).
The majority of Greece’s transmission and distribution lines belong to state-owned utility the Public Power Corporation (PPC).
Greece’s environment and energy minister, Kostas Skrekas, said €2.1 billion was the highest offer for the privatization of a public enterprize in the nation’s history.
The PPC this month revealed the interested bidders also included Luxembourg-headquartered private equity group CVC Capital Partners; the Mitsubishi Banking Corp-owned First Sentier Investors Group; and New York-based investor KKR Group, as the eight-month sale process entered its final stage.
Green and smart energy renaissance
The windfall is much greater than the utility could have expected two years ago, as high borrowing costs and record losses hamstrung the electric company.
The New Democracy government elected in 2019 shifted energy policy towards renewables and has pledged to phase coal out by 2025. Kyriakos Mitsotakis and his cabinet have also adopted a new electric vehicle (EV) law and are preparing the country’s first energy storage policy and tenders.
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The part privatization of the distribution grid will enable the PPC to pay down debt and finance its investment plans.
With the company under new management since the election, and having pivoted from coal towards solar, EV and storage investment, stated plans to devote a chunk of the nation’s post-Covid, ‘recovery and resilience facility‘ EU funding towards upgrading the distribution network give a pointer to where some of the Macquarie cash is likely to be diverted.
A greener energy system will require a more powerful and dynamic electric distribution network, able to accommodate and manage higher amounts of intermittent renewable energy.
With the EU funding needing to be matched by private investment, €2.1 billion is not a bad start.
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Source: pv magazine
