Countdown for Private Investments of the Recovery Fund

By Tasos Dasopoulos

The beginning for the attraction of private investments amounting to 35 billion euros until 2026 is made these days, with the activation by the commercial banks of the announcements for the submission of investment proposals that will be financed by the Recovery Fund.

As it is known, shortly before the end of 2021, the National Bank, Piraeus Bank, Alpha Bank, Eurobank, Optima Bank and Pancretan Bank signed the business agreements with the Ministry of Finance for their participation in the financing of private investments through of the Recovery Fund. Earlier, similar agreements were signed by the European Investment Bank (ETEp) and the European Bank for Reconstruction and Development (EBRD), which will contribute to the financing with 5 and 1 billion euros respectively.

As for the commercial banks, they are expected to receive the first investment proposals in February. Once an investment proposal arrives, it is estimated that it will take 6 weeks to 3 months before its financing is evaluated and approved. This period is calculated according to the knowledge of the company, the industry, the viability and the return of the investment plan, the complexity of the loan and the commentary of the contracts.

It is clear that from the 12.7 billion euro loans secured by Greece from the Recovery Fund, only new investments will be financed. In other words, investment plans will be rejected which will seek to finance ongoing investments, which have already been financed, with new funds.

However, new investments are eligible which have started to be financed by the private investor before the application for financing from the Recovery Fund is made. Of course, the investments are compatible with the five main categories of investments financed by the Fund: Green investments, digital investments, innovation, extroversion and acquisitions and mergers.

The first tranche of the € 970 million Recovery Fund loans has already been transferred to the banks and is now available for investment financing. In fact, according to sources from YPOIK, the first private investors whose investment will be approved in this first phase will have a small interest rate bonus. This is because the next installment of financing to the commercial banks with loans from the Recovery Fund will have a slightly higher interest rate than the 0.35% of the first installment.

April and the disbursement of the first installment

Along with the first private investments, the first regular installment of 3.56 billion euros is expected to be disbursed to Greece from the Recovery Fund. The application for the installment was made from the end of 2021, after the Ministry of Finance had completed the signing of the business contract with the EU, in which the schedule and the roadmap for the milestones of the overall program were finalized.

The implementation of the first 15 milestones associated with the first installment is expected to be officially approved by the EFC in March. The disbursement of the money to Greece is expected in April.

Meanwhile, the newly established Recovery Fund Coordination Service, in addition to maturing projects and implementing budget projects of around € 6 billion, is now dealing with around 80 milestones in the second and third of Recovery Fund funding. Competent sources of YPOIK admitted that the work that needs to be done is difficult, but there has now been a normalization in the operation of the Greek plan, one that the preparation phase has ended and now its implementation can begin in time.