February 14, 2020 / 12:35 PM / 8 days ago

UPDATE 2-Greece to start power distribution operator sale in September

(Add loan agreements between EIB and Greece)

ATHENS, Feb 14 (Reuters) - Greece will begin the sale of a minority stake in power distribution operator HEDNO in September, Energy Minister Kostis Hatzidakis said on Friday, after the European Investment Bank (EIB) agreed to offer a new loan to upgrade it.

Greece has said the buyer of the 49% stake in HEDNO, which is at present fully owned by Public Power Corp. (PPC), will also have increased minority rights.

PPC’s finances have weakened in recent years as the utility copes with more than 2.7 billion euros ($2.93 billion) of unpaid bills from customers who struggled to meet payments during the country’s economic crisis that broke out in 2009.

Hatzidakis has called the planned sale “a cash injection” for PPC and a way to modernise Hellenic Electricity Distribution Network Operator (HEDNO).

The EIB, which is the European Union’s lending arm, on Friday agreed to offer a 20-year loan facility of 100 million euros to PPC, as part of an approved facility of 255 million euros to help it modernise HEDNO and build more than 7,000 km of new medium and low voltage power lines in Greece.

“Upgrading and reinforcing electricity distributions across Greece will not only ensure more reliable electricity...but crucially this will enable the national network to better supply and cater for the technical needs of the increased used of renewable energies,” the EIB’s head Werner Hoyer said.

Greece plans to shut down almost all its coal-fired plants by 2023 and ramp up investment in green energy.

Under a separate agreement, the EIB said it will offer 200 million euros to National Bank of Greece and Piraeus Bank to back investments of 560 million euros by farmers and businesses in agriculture and bioeconomy.

The EIB last year agreed to offer total financing of 2 billion euros for energy, infrastructure and climate change projects in Greece, which exited a series of bailouts in 2018. ($1 = 0.9230 euros) (Reporting by Angeliki Koutantou; editing by David Evans and Alexander Smith)

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