New Democracy Wants to Speed Energy Privatization

(AP Photo/Thanassis Stavrakis, file)

ATHENS – With Greece’s state-run electric utility deep in debt and bleeding red on the edge of collapse, the new New Democracy government wants to accelerate the sale of energy enterprises, including natural gas utility DEPA, which is 65% state-owned, said Reuters.

The previous Radical Left SYRIZA passed legislation that split DEPA operations, with the aim to sell a 50.1% stake in its commercial business and a minority stake in its distribution networks across Greece, giving up government control as part of continued demands by the country’s creditors to privatize.

Hatzidakis said he would soon amend that law to allow for the sale of majority stakes both in DEPA’s retail operations and its distribution grid, the news agency reported.

“We have indications that there will be strong (investor) interest.” Hatzidakis, 54, has been given the job of rescuing the state-owned Public Power Corp (PPC) which is buried under some 2.7 billion euros ($2.98 billion) in debt, much of it piled up because SYRIZA let people who couldn’t pay be protected from having their lights turned off at times and with 40 percent discounts being given those with low incomes.

Electric rates have been increased although the effect hasn’t been determined yet as people who already couldn’t pay will now face higher bills they can’t pay either. Discounts have also been reduced, targeting even more vulnerable customers.

Hatzidakis said the state would settle subsidies owed to PPC in return for providing cheap electricity to vulnerable customers and remote islands. “It’s about 200 million euros ($220.79 million) and will be paid in the coming months,” he said.

Under the terms of three international bailouts of 326 billion euros ($358.89 billion) that expired on Aug. 20, 2018, PPC will sell power to its peers at below-cost prices to help open up the sector via so-called NOME auctions. Hatzidakis says this has cost the utility about 600 million euros ($662.38 million) and auctions would end.

The government has been discussing with its lenders alternative structural measures for PPC and the energy market, including gradual decommissioning of coal-fired plants and partial privatization of the power distribution grid, Hatzidakis said.

“NOME will be scrapped and the auction which is scheduled for October will not take place,” he said. “The government needs to have finalized structural measures for the energy market and PPC by the end of October, mid-November,” he added.