Aluminium of Greece has signed a long-term electricity supply agreement with Public Power Corporation (PPC), ending a long-running dispute between one of the country's biggest energy consumers and its dominant electricity producer.
The agreement for a 7-year supply contract came “as a result of intensive negotiations between the two parties, held over a period of several months, and brings to a final close the PPC-AoG conflict over the pricing of electricity,” Mytilineos Holdings, which controls Aluminium of Greece, said in a statement earlier in October.
“Negotiations took place in a constructive and positive climate, driven by the need to consider the financial interests of the two companies, the amicable settlement of problems in the energy market and, of course, the competitiveness of the Greek industry” it said.
The company “welcomes this agreement, which acknowledges the specific consumption profile of Aluminium of Greece and, at the same time, enhances PPC’s liquidity at a challenging juncture” it added.
The agreement envisages the immediate advance payment of Eur100 million by the Group to PPC.
It also foresees that at the start of each contractual year, Aluminium of Greece will make an advance payment, also without interest, “equal to 30% of the annual value of electricity.”
Moreover, in the event of an increase in Aluminium prices on the London Metal Exchange (LME), PPC will receive a bonus on the price of electricity; yet in case of a price decline PPC will incur no penalty.
“This mutually beneficial and rigorously structured agreement marks the beginning of a new era in the relations of the PPC, the country’s largest industry, with its largest customer” Mytilineos said.
Mytilineos Group is a leading Greek industry active in metallurgy and mines, energy and EPC projects.
Mytilineos Holdings is listed on the Athens Exchange and has a consolidated turnover in excess of Eur1.3 billion. It employs some 2,700 people directly and many more indirectly in Greece and abroad, it said.