* Q1 EBITDA at 345 mln euros vs 314 mln a year ago
* Lower energy costs and provisions for unpaid bills help
* Sales drop 8.8 pct, hurt by softer demand, tariff discounts (Adds details, background)
ATHENS, May 26 (Reuters) - Greece's dominant power utility Public Power Corp. (PPC) reported a 10 percent rise in first-quarter core profit on Thursday, helped by energy savings from declining oil prices and lower provisions for unpaid bills.
PPC, which is 51 percent state owned, said earnings before interest, tax, depreciation and amortisation rose to 345.2 million euros ($386 mln), from 313.9 million euros in the same period in 2015.
The utility has been hit by significant provisions for unpaid bills as a protracted recession in Greece and capital controls imposed last June took a toll on households and businesses.
PPC has said that overdue bills reached 2.3 billion euros at the end of 2015. However, the company was optimistic on Thursday that collection of the payments would improve after Greece clinched a debt deal with its international lenders on Wednesday.
A payment scheme launched last year for the settlement of arrears would also help, it said.
Sales dropped 8.8 percent in the first quarter to 1.4 billion euros, hurt by lower demand for electricity, cheaper tariffs and increasing competition from rival power producers.
$1 = 0.8953 euros Reporting by Angeliki Koutantou; Editing by Susan Fenton