Greece: DEDDIE sale’s market test

, SEE Energy News

The Regulatory Authority for Energy (RAE) has recently set DEDDIE’s weighted average cost of capital (WACC) level to 7 % for 2020 and to 6.7 % between 2021 and 2024, which should be very attractive for potential investors.

More than 10 participants, including renowned European operators and infrastructure funds, took part in a market test for the sale of 49 % stake in Greek electricity distribution system operator DEDDIE, a subsidiary of Public Power Corporation (PPC).

The turnout has been deemed satisfactory and PPC’s Board is expected to officially launch the privatization process soon. According to estimates, the first round related to the expression of interest should be completed by the end of January 2021, while the complete process should be finalized in spring next year.

According to DEDDIE’s 2020-2028 business plan, the operator’s investment funds will be gradually increased to reach annual levels of 300-350 million euros, from current 150-170 million euros. DEDDIE’s new investments will focus on upgrading and expanding the electricity network to facilitate growing needs of the renewable energy sector and broadened network presence, especially on islands, as well as ambitious electric vehicle targets. The overall upgrade will include network digitization projects for advanced grid management and smart meter installations. DEDDIE’s investments were on the downward trend in recent years. Contrary to other EU operators, the company’s regulatory asset base value has decreased during the period of economic crisis. as new investments each year have been outweighed by the depreciation levels of previous projects. The privatization is expected to provide funding for many modernization projects.