Expression of Interests sought for strategic partnership in geothermal development in Greece

Klima, Milos Island Greece (Source: Flickr, Klearchos Kapoutsis, Creative commons)

Parker O'Halloran 12 Jun 2017

Icelandic engineering firm Mannvit and Greek based Euroconsultants have been working together to prepare several geothermal projects for investment in Greece. Below is the recent announcement and call of interest.

INTRODUCTION
PPC Renewables S.A. (the “PPCR” hereafter), a wholly-owned subsidiary of Public Power Corporation S.A. which is the largest electricity production and supply company in Greece, wishes through this Invitation to find a strategic partner (the “Partner” hereafter) to participate in the Geothermal Power Plants Company that will finance, develop and manage the Geothermal Power Plants to be installed in the four (4) leased by PPCR geothermal fields (all together consisting the “Geothermal Power Plants Project” hereafter), as described below:

a) A power plant with nominal capacity of at least 5MW in the geothermal field of Milos-Kimolos-Polyegos islands group;
b) A power plant with nominal capacity of at least 5MW in the geothermal field of Nisyros island;
c) A power plant with nominal capacity of at least 8MW in the geothermal field of Lesvos island; and
d) A power plant with nominal capacity of at least 5MW in the geothermal field of the Methana peninsula (in mainland).
The capacity of the above Geothermal Plants can be potentially expanded in the future, under terms to be agreed with the Partner.

THE GEOTHERMAL POWER PLANTS PROJECT
PPCR holds the exclusive rights to explore and exploit the above geothermal fields and has available technical studies which identify potential fluid reserves. PPCR will conduct all the necessary exploration works and the drilling works for the production of the steam fluid. PPCR will continue to be the sole owner of the studies and of the management rights in the geothermal fields.

Approvals, licenses and permits by the competent Ministries and other administrative authorities will be required for the formation of the Geothermal Power Plants Company and the operation of the Geothermal Power Plants. PPCR will undertake all actions to obtain all necessary permits, licenses etc.

It is PPCR’s intention to establish a subsidiary Geothermal Power Plants Company to finance, develop and manage the Geothermal Power Plants.

The Partner is anticipated:

(a) to acquire a majority stake in the share capital of the Geothermal Power Plants Company against a lump sum cash consideration payable to PPCR; and

(b) through its participation in the Geothermal Power Plants Company, to:

– finance the Geothermal Power Plants Project by a combination of debt and equity; and

– design, monitor installation, construct and operate the Geothermal Power Plants, in order to proceed to the production and sale of electricity to the System and the Grid.

(a) and (b) jointly referred to as the “Transaction”.

It is also anticipated that PPCR will enter into an agreement with the Geothermal Power Plants Company for the sale of the geothermal steam fluid, in a purchase price(s) to be determined at a later stage.

SELECTION PROCESS OVERVIEW
The Selection Process will be conducted in the following two (2) phases:

3.1 Phase A – Pre-qualification stage

Interested Parties are invited to participate in the Selection Process by submitting a letter of Expression of Interest accompanied by the relevant Supporting Documents.

Interested Parties will be granted additional initial information through an Information Memorandum upon signing of a Confidentiality Agreement with PPCR.

PPCR will evaluate the Expressions of Interest on the basis of the pre-qualification criteria, in order to select such Interested Parties that qualify as Eligible Partners.

3.2 Phase B – Request for proposal

Eligible Partners will receive a Request for Proposal (“RfP”), which will include detailed instructions on the content and form of submission of their binding offer (“Binding Offer” hereafter).

At this stage Eligible Partners will be given access to a virtual data room.

RIGHT TO PARTICIPATE
Natural persons, single legal entities or consortia (each an “Interested Party”) are eligible to participate in the Selection Process and submit an Expression of Interest file.

A natural person or a single legal entity may only participate in the Selection Process through a single Expression of Interest, i.e., either singly as an Interested Party on its own, or as a Member of a single Consortium. Affiliated entities are allowed to submit separate Expressions of Interest.

If an Expression of Interest is submitted by a Consortium, it shall be required to designate one of its Members as the leader (the “Leader” hereafter). The Leader shall be required to hold a stake in the Consortium corresponding to at least 33.34% of the total interest in the Consortium and fulfill the Technical Eligibility Criterion.

PRE-QUALIFICATION CRITERIA
All Interested Parties have to meet the Financial Eligibility Criteria and the Personal Situation Criteria upon submission of the Expression of Interest file and throughout the Selection Process. All Interested Parties have to meet also the Technical Eligibility Criterion as from the submission of the Binding Offers in Phase B and throughout the rest of the Selection Process.

In case of a Consortium:

the Financial Eligibility Criteria must be fulfilled by either the Consortium as a whole weighted by the participation of each Member in the Consortium or by each Member of the Consortium pro rata to such Member’s participation in the Consortium;
the Technical Eligibility Criterion must be fulfilled by the Leader of the Consortium that has a participation of at least 33.34%;
the Personal Situation Criteria must be met by each one and all of the Members of the Consortium.
5.1 Financial eligibility criteria

If it is a legal entity, the average annual consolidated equity position, calculated as total consolidated assets minus total consolidated liabilities for the most recent three (3) audited financial years equals or exceeds EUR One Hundred Fifty Million (€150,000,000) (the “Minimum Financial Level” hereafter);
and

Positive Earnings Before Interest Tax Depreciation Amortization (EBITDA) results over the most recent three (3) financial years.
An Interested Party (whether acting singly or as a Member of a Consortium) may rely on an Affiliate in order to fulfill the Financial Eligibility Criteria.

5.2 Technical eligibility criterion

Developed and operated Geothermal Power Plant(s) of total nominal capacity of at least 25 MW during the last ten (10) years of which:
At least one (1) Geothermal Power Plant with nominal capacity of minimum 10 MW during the last ten (10) years.
An Interested Party (whether acting singly or as a Member of a Consortium) may rely on a Third Party (the “Third Party Supporter” hereafter) in order to fulfill the Technical Eligibility Criterion. A Third Party Supporter may support more than one Interested Party.

5.3 Personal situation criteria

Any Interested Party who, by means of a final decision of a criminal Court has been proven to have committed criminal offences in any jurisdiction, which are related to its professional or business conduct, is not permitted to take part in the Selection Process, and consequently shall be disqualified.

SUBMISSION OF EXPRESSION OF INTEREST – PROVISION OF
INFORMATION AND CLARIFICATIONS
One (1) sealed envelope containing two (2) sealed envelopes, one original and one copy, of the Expression of Interest file must be submitted by each Interested Party.

The Expression of Interest file must be submitted in person or by post to the following address:

PPC Renewables S.A.
3 Kapodistriou Str
GR 153 43, Agia Paraskevi
Athens, Greece
To the attention of: Mr. Michael Chlaboutakis
All Interested Parties wishing to participate in the Selection Process should submit their Expression of Interest file not later than Monday 10 July 2017, 15:00pm Athens current local time.

6.1 Contents and form of the Expression of Interest file

The Expression of Interest file must contain:

A letter of Expression of Interest;
The applicable Supporting Documents
The letter of Expression of Interest and the Supporting Documents should be submitted either in English or in Greek.

Consortia must submit a joint letter of Expression of Interest and full set of Supporting Documents for each Member.

The PPCR has the right to request originals, official extracts, and additional information regarding the Supporting Documents at any time.

6.2 Provision of information and clarifications

Interested Parties are entitled to address in writing (e-mail or fax) detailed requests for clarification to the following contact person:

Mr. Michael Chlaboutakis
PPC Renewables S.A.
Tel.: +30 211 2118060
Fax: +30 211 2118089
Email: mchlaboutakis@ppcr.gr
PPCR will only accept requests for clarification no later than 17:00pm Athens current local time on 26.06.2017. All such written questions and the respective given responses will be made available in due time on the website of the PPCR (www.ppcr.gr) in an anonymous way.

IMPORTANT NOTICE

It should be noted that the current publication is only for informational reasons and consists a mere extract of the most important points of the Invitation to submit and Expression of Interest.

It does not substitute the full document and it does not contain the full length of information necessary for Interested Parties to prepare their Expression of Interest file.

Interested parties wishing to obtain the full document can download it by clicking here.

Source: PPC Renewables