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EBRD supports Greek PPC to keep up the momentum for coal phase-out

The European Bank for Reconstruction and Development (EBRD) is providing a senior unsecured loan of up to 160 million euros to Public Power Corporation (PPC), the largest power producer and electricity supplier in Greece, to address the impact of the coronavirus pandemic.

The loan will support PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It will also strengthen the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonisation.

With a total installed capacity of 12.2 gigawatts (GW), PPC is the largest electricity generator and supplier in Greece. It is also the owner of the country’s electricity distribution network and the sole provider of electricity to those Greek islands that are not connected to the national network. PPC is controlled by the Greek government, which owns a majority of the issued shares (51.12 per cent).

PPC is central to Greece’s efforts to implement an ambitious decarbonisation strategy. The company announced at the end of last year that it plans to switch off at least 12 coal-fired units of 3.4 GW by 2023, instead of 2028 as initially planned. PPC also aims to boost its green power by 1 GW until 2024, to take a 10-20 per cent share of Greece’s green energy market.

However, the Greek power supplier was under a lot of pressure already before the coronavirus crisis. Burdened with more than 2.7 billion euros of unpaid bills owed by customers and loss-making coal power plants PPC’s EBITDA fell to 216 million euros in 2019 compared to 828 million euros the previous year.

“The extraordinary conditions that we faced due to COVID-19 pushed us to change our business operation in order to adapt to the new environment and to redefine the relationship with our customers, a process which we had already initiated in previous months,” said PPC Chairman and CEO George Stassis adding that despite initial disruptions of liquidity at the outset of the pandemic in March, the company managed to regain pre-COVID levels since May.

The EBRD is now helping PPC to establish an action plan for identifying key climate-related risks, opportunities and mitigation.

“PPC, and the Greek energy sector more generally, have embarked on a remarkable strategic reorientation away from coal and towards a green and sustainable model,” pointed out Andreea Moraru, EBRD’s Regional Head of Greece and Cyprus.

“This is one of the most ambitious energy transitions of any European country and PPC is central to those efforts. This loan is part of EBRD’s commitment to supporting vital infrastructure providers in weathering the immediate impacts of the COVID-19 crisis while sustaining, and accelerating, their long-term efforts to address the climate change crisis,” Mr Moraru concluded.

In its revised National Energy and Climate Plan (NECP) Greece set out to leave only 660 megawatts (MW) of lignite capacity after 2023 and it also aims to higher renewables penetration in its energy portfolio. The government aims energy generated from wind, solar and hydroelectric power to account for at least 35 per cent of the country’s energy consumption by 2030.

The energy strategy of Greece also envisaged reducing greenhouse gas (GHG) emissions by more than 42 per cent compared to emissions in 1990 and more than 56 per cent compared to emissions in 2005, thus exceeding even the core EU targets.

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