No further need for RES loan revisions, bank official notes

The Production Reconstruction, Environment and Energy Ministry has not sought improved loan terms for the photovoltaic sector from a Greek bank holding the country’s largest portfolio of PV sector loans, a highly-ranked official at the bank has told energypress, responding to a question on the issue.

Slightly over a month earlier, Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis had promised renewable energy source (RES) producer representatives he would intervene and seek lower interest rates and extended pay-back periods from banks for all PV producers, big and small. The pledge had been met with relief by the sector representatives.

However, the bank official has now told energypress that there is no reason for any political intervention as necessary adjustments to loans have already been made, based on banking criteria, especially for RES investors whose interest rates were deemed as excessive. The loan-term revisions were not applied universally, but on a one-on-one basis, the official added.

No PV investors were currently paying interest rates of more than 9 percent, the bank official noted, adding that, under present terms, all investments were sustainable.

The bank official warned, however, that both RES investors and banks would face trouble if LAGIE, the Electricity Market Operator, were to continue delaying payments to producers.

LAGIE lies at the end of the sector’s payment chain. As has been widely reported, the sector is experiencing cashflow problems stemming from PPC (Public Power Corporation) and the growing amount of overdue unpaid electricity bills owed to the power utility by consumers. Consequently, PPC is struggling to transfer RES fees to IPTO, the power grid operator, which, in turn, is unable to provide LAGIE with amounts allotted for RES production. It is believed that LAGIE’s payments owed to RES producers have reached some 400 million euros.

An estimated 2.5 billion euros in bank loans have been extended to PV producers, the bulk of these offered during the sector’s rapid expansion not too far back. In some cases, interest rates on loans reached as much as 12 percent.