Comments on press articles

Commenting on today’s press reports in the electronic media concerning the decision of the Regulatory Authority of Energy (RAE) about the approval of IPTO’s Allowed Revenue for the Regulatory Period 2018-2021 and in order to prevent the creation of erroneous impressions, ADMIE Holding would like to clarify the following:

-On the 23rd of March and after several months of delay, RAE issued the above-mentioned decision for ADMIE’s Allowed Revenue, which provides visibility for the Regulatory Period 2018-2021. The main elements of the decision are shown in the table below:

 

       2018         2019         2020       2021
Regulated Asset Base 1,449,808.000 1,684,495.000 1,941,335.000 2,059,771.000
Weighted Average Cost of Capital 7.0% 6.9% 6.5% 6.3%
Allowed Revenue 

 

 

 233,959.000 

 

 

 252,427.000 

 

 

 281,018.000 

 

 

 285,895.000 

 

 

 

 

 

-The reduction of the WACC reflects mainly the lower risk-macro environment and lower company-specific borrowing costs.

-The €1 billion investments for the next four years planned by IPTO will lead to a substantial increase of the Operator’s Regulated Asset Base. As a result, the Allowed Revenue will also increase, counterbalancing the reduced WACC.

-ADMIE Holding notes with surprise the allegation about potential problems related to the company’s bank lending, as IPTO is one of the most under-leveraged Transmission System Operators in Europe. Under no circumstances, the small reduction of the WACC can affect the bank lending of IPTO.

-IPTO’s management in close cooperation with ADMIE Holding and the Strategic Investor State Grid Corporation of China is carrying on with the acceleration of its investment program, as reflected in the new Ten Year Network Development Plan. The optimal use of the human resources and the specialized technical capabilities of the Operator will be instrumental in this regard.

-Furthermore, the acceleration of the interconnections of the islands to the mainland Electricity Transmission System will lead to a substantial reduction of the burden to all electricity consumers in Greece through the reduction of the Public Service Obligations (PSO’s).

-IPTO’s Management has already demonstrated its ability to increase its efficiency and to accelerate major projects, through the timely completion of Phase A of the Cyclades Interconnection, the acceleration of Phase C of Cyclades Interconnection, the incorporation of the next wave of island interconnections and, finally, through the successful voluntary exit scheme which will result in a reduction of operating costs by approximately €8.5 Million on an annual basis.

 

 

 

Athens, 27 March 2018