Greek power grid faces growing debt problems

The Greek economy teeters on the brink of disaster as politicians begin to discuss whether the country will be forced to leave the euro zone.

But Reuters reports Greece also faces a more immediate concern, with the country's electricity transmission and distribution system in danger of major blackouts caused by the growing debt crisis.

Greece imports all of its natural gas and a significant amount of its electricity, but expensive renewable energy subsidies and two untimely bankruptcies have left LAGHE, the operator of the country's electricity distribution grid, with more than 350 million euros of debt.

Now LAGHE, along with other major utilities and energy companies, has decided to seek an emergency loan to help continue normal operations as the crucial tourist season approaches.

"LAGHE has sought information on how the loan would work but it has not yet made a formal application," one official told Reuters. "The Loan and Consignments Fund is inclined to give the loan, if it receives an official request."

Bloomberg notes an analysis from Standard and Poor's found that unpaid electricity accounts grew 50 percent this year, adding to an already difficult business environment.

An outlook for Greece's power market is available at PennEnergy's Research area.

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