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Greek Energy 2020 outlook - Brave new greener world

In our new Greek Energy Sector Outlook for 2020, we update our estimates for Mytilineos & Terna Energy, retaining our positive stance in view of the structural changes in the Greek energy market.

Market is undergoing massive reform – Despite some progress achieved in the past few years, the energy market remains in a transitory state and in need of significant regulatory changes to achieve fully liberalized status. Greece has showcased significant commitment towards the implementation of much-needed energy-related reforms, but its efforts have been affected – and in some cases disrupted – by challenging operating conditions, such as declining consumption and constrained finances. Within a steadier backdrop, amid domestic economic recovery, improved electricity demand dynamics and declining Greek bond yields, there was substantial progress recently, paving the way for the implementation of major institutional reforms in the coming years that aim to enhance competition across all segments of the energy market.

De-lignitisation & RES investments at the core of reform; conducive for independent players – Against this backdrop, the Govt presented its National Energy & Climate plan at the end of 2019, which seems quite ambitious going beyond EU commitments. It aims to transform the Greek energy sector by 2030, reducing carbon emissions by 42% (vs. 1990 levels) and increase the share of RES in the total energy mix by 35%. The cornerstone of this strategy is Greece’s full de-lignitisation by 2028, most of which will take place by 2023. To that end, the Govt is working on initiatives that will help transition lignite regions to the modern era, through appropriate private investments, with the support of the EC’s “European Green Deal” program, that will finance €1 trillion worth of investments in green technologies and sustainable solutions over the next decade (Greece eligible for >€1bn funds during 2020-2027).
Underlyings
MYTILINEOS S.A.

Mytilineos Holdings is an industrial group engaged in the sectors of Metallurgy, EPC, Energy, and Defence. Co. and its subsidiaries are engaged in three main operating business segments: Metallurgy, Constructions and Energy. Co. and its subsidiaries monitor its performance on Metallurgy and Mining Sector through the subsidiaries Aluminium S.A. (Alumina-Aluminium) and Sometra S.A. (Zinc-Lead). Co., through its subsidiary, METKA S.A., is an EPC Constructor in Greece.

Terna Energy S.A.

Terna Energy is a vertically organized renewable energy sources group based in Greece. Co. is mainly engaged in the energy and construction sector. Co. is active in Wind Energy, as well as Hydroelectric Projects, Solar PV and Integrated Management of Waste to Energy and Biomass Projects. Co. is also engaged in the research for the operation and construction of projects related to other renewable energy sources (RES). Co. maintains a class 6 contractor certificate and its activity in the construction sector relates to the construction of private and public projects as a main contractor or subcontractor or through joint ventures.

Provider
Eurobank Equities
Eurobank Equities

Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.

Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.

Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.

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