EBRD reports close to €800 million investment in Greece in 2020

The European Bank for Reconstruction and Development (EBRD) stepped up its investments in Greece in 2020 to address immediate needs caused by the coronavirus pandemic and to create the foundations for a recovery with a focus on building back better economies.

Continuing its support for the Greek economy in 2020, the Bank made €797 million new investments in 17 projects, compared to €571 million in 13 projects in 2019, putting Greece in the EBRD’s top five countries of investment last year. 

Andreea Moraru, EBRD Director for Greece, said: “We are very proud to contribute to the robust response of the Greek economy to the crisis, supporting the recovery, helping local businesses with their needs and facilitating the transition to greener economic activities.” 

The Bank provided a senior unsecured loan of up to €160 million power utility PPC. The facility will support PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It will also strengthen the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonization. 

The EBRD also stepped up its efforts to help the Greek private sector by investing €57.5 euros in GEK TERNA’s successful issuance of a seven-year €500 million bond. GEK TERNA S.A. is the holding company for a group active in concessions, renewable energy, thermal energy and construction, incorporated in Greece. 

This issuance was the largest bond transaction to be listed to date on the Athens Stock Exchange and the first corporate issuance in the country since the outbreak of the pandemic. The proceeds will be used to refinance secured commercial loans with longer tenors and reduced financing costs, enabling a corporate transformation that will optimize the capital structure of GEK TERNA. 

Facilitating the transition from fossil fuels to renewable sources of energy, EBRD launched its just transition initiative linking the transition to a low-carbon economy with inclusive economic development. One of the first projects under this approach was the Bank’s €75 million investment in the successful Eurobond tap issuance by Hellenic Petroleum (ELPE), in support of a new solar photovoltaic plant in Greece, the largest solar energy project in south-eastern Europe to date. 

The total funds of €100 million raised will enable ELPE to finance the construction of 18 solar photovoltaic (PV) plants with a total installed capacity of 204 MW in Kozani, western Macedonia, the country’s most coal-dependent region. The solar park will be built close to existing coal-fired power plants that are being phased out and is expected to reduce CO2 emissions by 320,000 tons annually.

In addition, the EBRD invested €50 million in the first senior preferred (SP) green bond issuance by the National Bank of Greece (NBG), combining support for capital market development and for the green economy in Greece. It was the first green bond issuance by a Greek bank and the first SP instrument to be issued by a Greek financial institution. 

Together with other investors, the EBRD invested in a €186.4 million securitization transaction of automotive leases, originated by Olympic Commercial and Tourist Enterprises S.A. (Avis), the leading car leasing company in Greece and master franchisee of the global car rental company Avis Budget Group.  

The transaction was an important milestone for the Greek securitization market as it was the largest issuance by a non-bank originator and the first auto lease asset-backed security transaction in the country with a sustainable and green element. 

Part of the proceeds will be used by Avis for the replacement of its existing fleet with lower CO2 emissions, electric and hybrid vehicles, helping the company to reduce its diesel footprint.

In late 2020, the EBRD joined forces with the Ministry of Development and Investments of Greece to establish a new public-private partnership (PPP) preparation facility cooperation account, following a request from the Greek authorities. 

The EBRD will manage the facility, which will provide high-quality, client-oriented project preparation, training and advisory services, policy support and institutional strengthening activities related to the infrastructure sector in Greece. The Ministry will fund the activities of the facility with €20 million. The project pipeline will mostly be in the social infrastructure sector (education and health), sustainable urban infrastructure, and water and waste management.

Keeping vital trade flows going, the Bank provided a €20 million factoring facility to ABC Factors under its Trade Facilitation Program (TTP). Building on the EBRD’s cooperation with Alpha Bank, the parent company of ABC Factors, the facility will enable the factoring subsidiary to further expand its portfolio of small and medium-sized enterprises (SMEs) and local corporate clients by providing funding for domestic and international factoring transactions. Greece remains the EBRD’s most active country under TFP, with close to €320 million trade transactions in 2020.  

In 2020, the EBRD started 41 new advisory projects with Greek SMEs in various areas, such as strategic and business planning, marketing and e-commerce, operational efficiency, financial management and digitalization, and delivered five online export training seminars to more than 100 participants. Donor funding from Greece, as well as from the European Union through the European Investment Advisory Hub of the European Investment Bank, has been crucial. 

Papoutsanis, a leading Greek manufacturer of soap and liquid cosmetics, became the first Greek firm to join the EBRD’s Blue Ribbon program, which combines business advice and finance for companies that stand out for their market leadership and high-growth potential. 

Furthermore, the Board of Directors of the EBRD approved a new strategy for Greece, which will guide the bank’s investment and policy engagement in the country during the next five years. 

The EBRD responded to the coronavirus pandemic with record investment of €11 billion in 2020 through 410 projects. This represents a 10 per cent increase in annual business investment relative to 2019, when the bank provided €10.1 billion to finance 452 projects.

Energy ministry seeks recovery fund support for many domains

The energy ministry, seeking to ensure EU recovery-fund support for mature projects in key energy-related domains, has proposed their inclusion in a national plan whose first draft will be submitted by the government to the European Commission this month.

Greece is entitled to approximately 32 billion euros from the EU recovery fund, worth a total of 750 billion euros (390bn in subsidies and 360bn in loans) and established to counter the impact of the global pandemic.

Approximately 37 percent of the recovery funds will be used for green-energy development.

Energy efficiency upgrades of buildings; grid interconnections and RES initiatives, including energy storage; electromobility; nature protection; decarbonization; spatial planning for RES development; solid and liquid waste management; and smart power meter installations, a severely delayed project in Greece, are among the domains the energy ministry wants included in the national plan for EU recovery funds.

The energy ministry has previously sought support for some of these domains through the National Strategic Reference Framework.

A total of 130,000 efficiency upgrades of buildings have so far received subsidy support over a decade-long period through Greece’s Saving at Home program. The ministry is looking to significantly increase this rate to 60,000 upgrades per year through the recovery funds program.

Greece’s energy ministry will also seek recovery fund support for two major electricity interconnections – Crete’s major-scale interconnection,  to link the island’s grid with Athens; and the fourth phase of the Cyclades interconnection – both being developed by power grid operator IPTO.

 

Green energy to remain a catalyst for Greek economic growth

Local authorities, in the coming months, will focus on reigniting green energy investment interest expressed by many international funds until February, when the coronavirus outbreak began halting plans.

The restart could be a challenging task as certain funds may hold back following losses on stock exchanges.

Even so, the pandemic’s impact on green energy markets is expected to be far milder compared to other sectors.

Market analysts throughout the continent believe prospective investments in renewable energy, waste management, energy efficiency upgrades for buildings, as well as decarbonization initiatives, will serve as key factors for economic growth in Europe, including Greece.

The European Green Deal, aiming for a climate-neutral EU of zero greenhouse gases by 2050, will not be endangered by the current pandemic-induced crisis as it is a short-term condition that pales by comparison to the grander plan set out for the next 30 years, energy ministry sources told energypress.

However, a slight regression of green energy investment plans is initially anticipated, compared to positions in February.

Between 70 and 80 percent of foreign investors are expected to remain interested in Greece’s green energy sector in the months ahead, analysts believe.

 

 

Danish waste-to-energy model, China offers examined by PPC

Electricity production through virtually zero-emission waste combustion, a method adopted in Denmark, is one of a number of options being examined by the Greek power utility PPC as part of the country’s decarbonized future.

PPC’s existing coal generators, headed for closure, imminently, could be transformed into waste-to-energy plants.

PPC has received proposals from Chinese companies. Cost and environmental matters will be key factors in any decisions made by Greek officials.

Joint ventures could be formed to utilize the output of waste management PPPs (Public Private Partnerships) in Greece. Three such facilities currently exist in the country but more are expected to open in the near future.

The positions of local communities in lignite-dependent regions, such as west Macedonia, in the country’s north, and the price of waste-generated electricity will be pivotal.

Denmark’s Copenhill waste-to-energy plant, possibly the world’s most advanced such facility, was launched last month. It is situated in the heart of Copenhagen.

Designed as a lush downhill slope to host skiing and other recreational activities, the Copenhill facility processes the waste of 550,000 homes and 45,000 businesses, providing electricity and heating for 150,000 homes. The unit is designed to take in approximately 400,000 tons of waste annually for combustion.

Terna Energy signs PPP deal for Epirus solid waste treatment plant

The Terna Energy group has signed an agreement for a municipal solid waste treatment plant in Greece’s northwest Epirus region, based on a Public & Private Partnerships (PPP) scheme involving “Aeiforiki of Epirus”, a Terna Energy subsidiary, and the Epirus prefectural authority, the company announced.

The partnership agreement provides for the study, licensing, financing, construction, insurance, operation and maintenance of the waste management project for the next 25 years. The total duration of the agreement is 26.5 years and consists of an 18-month construction period as well as of a 25-year operation period. The investment is estimated to reach the amount of 52.6 million euros.

The fundamental axis of the investment plan concerns the management of conventional waste through the use of modern technologies aiming at absolute environmental protection in line with a financially viable strategy that will ensure long-term implementation and operation of the project.

Once launched, the project will be equipped to process 105,000 tons of waste annually through the Sewage Treatment Plan (STP), recycle at least 17,000 tons of appropriate materials and produce green energy with a capacity to satisfy the needs of 3,000 households, thereby offering CO2 emission savings measuring of 12,000 tons.

The project is expected to create 200 new jobs during the construction stage, 90 working positions during the 25-year operation period, as well as a large number of parallel jobs, including in the areas of transportation, trade and recycling management.

The operation of the new waste material processing unit promises to ensure the broader region’s compliance with existing EU regulations, strengthen environmental protection and lead to significant improvements in the quality of life and hygiene conditions for all citizens.

The project’s implementation will also offer both direct and indirect benefits in the fields of tourism, education and the new quality-based agricultural sector, representing a strategic objective for the entire country.