Italy's Edison Enters Greek Market in Joint Venture with Hellenic Petroleum

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Researched by Industrial Info Resources (Sugar Land, Texas)--In a five year strategic industrial plan lasting from 2008 to 2013, Italy's energy utility Edison S.p.A. (BIT:EDN) (Milan) will invest $9.9 billion boosting generating capacity, upstream and downstream hydrocarbon resource projects and new natural gas transmission and storage facilities. The company wants to consolidate its position as Italy's second largest power generator and expand its international operations, particularly in Greece, Turkey and the Balkans.

In Greece, Edison is planning a joint venture with Hellenic Petroleum S.A. (ATH:ELPE) (Aspropyrgos, Greece), the country's largest operator in the hydrocarbon sector. With an existing base of 390 megawatts (MW) of installed power, the companies have plans to create 1,500 MW of generating capacity, which would represent about 12% of current Greek capacity, making the joint venture the second largest power operator and trader in the country.

Current operations covering Edison's 65% interest in Thisvi SA's 420-MW combined-cycle power project, Hellenic's T-Power 390-MW combined-cycle plant and other power projects of the two companies will be moved under the auspices of a single company created by the joint venture. Current minority shareholders in Thisvi, Hellenic Energy & Development and Halcor, will have the right to keep a 25% overall equity by buying a sufficient amount of shares in the new company or will be able to sell their interests to the joint venture company. Major Greek industrial groups Helleniki Techodomiki and Viohalco S.A. (ATH:BIOX) will also cooperate in the venture.

Agreements signed in the first week of July could see the new company's installed capacity rising to 2,000 MW, expanding Hellenic's power and trading capacity to meet growing power demands in Greece. The company could make investments in renewable energy sources in Greece and pursue opportunities in power generation and trading in the Balkans. Formation of the company is scheduled to occur by the end of 2008, after anti-trust clearance has been obtained.

Edison, founded in 1883, claims to be Europe's oldest energy company and in 2007 had an installed capacity of 12,000 MW and revenues of $13.3 billion. It has operated a subsidiary, Edison Hellas, in Greece since 2002. Hellenic Petroleum, with interests in the power and engineering sector, had revenues of $13.6 billion in 2006. Major shareholders of the company include the Greek government (35.5%) and Paneuropean Oil & Industrial Holdings (35.9%).

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