Mytilineos, Endesa to develop Greek generation, including hydro

Greek metals and engineering group Mytilineos has signed a joint venture deal with Spanish power company Endesa to form the largest independent power producer in Greece, holding thermal and renewable generation, including hydropower.

The joint venture, which was not named, will have initial capitalization of 1.2 billion euros (US$1.6 billion), with Endesa holding a 50.01 percent stake, the companies said March 28. Mytilineos is to contribute its entire portfolio of thermal and renewable energy assets and licenses in a transfer to be complete in 12 months.

“The strategic alliance is an important step in the development of the Endesa European expansion plan,” the companies said. “(It is) a step forward in the leading position of Mytilineos in the Greek energy market.”

The new company will construct and operate natural gas and coal power stations; renewable energy plants including wind, hydro, and photovoltaic power; and electricity and emissions trading units, they said.

The companies said the financial power of the joint venture, the global utility knowledge of Endesa, and the local presence and industrial background of the Mytilineos Group, will support an ambitious development program, including expansion into southeastern Europe. The venture also is expected to enter the retail energy market after European Union liberalization rules are enacted in July 2007.

The asset base of the new joint venture will include 334 MW of cogeneration starting operations in June 2007, a 430-MW gas-fired plant starting operations in June 2009, more than 1,000 MW of renewables projects including hydro, and a proposed 600-MW coal plant having an investment of about 890 million euros (US$1.18 billion).

Mytilineos also announced it will absorb its Aluminium of Greece and Delta Project units as part of its operational restructuring plans. Mytilineos will take over both Aluminium and Delta and separate the company into a power generation and trading unit, and a production, construction, and alumina trading unit, it said.

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