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Edison and Hellenic agree €1.5bn joint venture
By Kerin Hope in Athens and Guy Dinmore in Rome
Published: July 4 2008 03:31 | Last updated: July 4 2008 03:31
Edison, the Italian power utility, on Thursday signed a joint venture agreement with Hellenic Petroleum, Greece’s largest refiner, with the aim of becoming the second-biggest power operator in Greece.
Edison said the 50-50 joint venture would invest €1.5bn ($2.3bn) over the next five years to reach a capacity of more than 1,500MW, about 12 per cent of the Greek market. With 390MW of installed capacity and another 420MW due to start up by 2010, the joint venture will be Greece’s biggest independent power producer.
John Costopoulos, Hellenic’s chief executive, said: “The strategic alliance ... significantly expands the group’s power generation and trading capacity to meet growing demand for electricity in Greece.”
Edison’s partners in the unit under construction in central Greece are Helleniki Technodomiki, the country’s biggest construction group, and Viohalco, a metallurgical group that accounts for almost 10 per cent of Greek exports. The two will have an option to acquire 25 per cent of the joint venture.
Edison is the third European electricity producer to enter the Greek market, after Spain’s Endesa and Italy’s Enel, which both have joint ventures with local business groups. Edison is already a partner with Depa, Greece’s state gas utility, in a joint venture to build an undersea gas pipeline from northwestern Greece to southern Italy to carry Azeri gas to Europe.
Independent producers are poised to capture market share as PPC, the debt-burdened state electricity utility, is unable to meet demand rising at more than 4 per cent annually.
Copyright The Financial Times Limited 2008