How the Recovery and Durability Fund runs

Of Tasos Dasopoulos

Preparation for the second tranche from the Recovery and Resilience Fund, inclusion of new projects accelerating private investment and preparation for the revision of Greece 2.0 and the addition of the Repower EU.

This summarizes the action of the Ministry of Finance, in the effort to keep the country in the first places of implementation of the national program of TAA, “Greece 2.0”.

Priority has been given to the proper completion of the milestones of the second tranche from the Recovery and Resilience Fund, which concerns grants of 1.97 billion euros.

As in the first € 3.6 billion tranche disbursed last April, the 25 milestones will now have to pass the EU Fiscal Policy Directorate and be approved by the relevant bodies within the next 3- 4 months for the installment to enter the public coffers until the end of the year.

At the same time, an effort is being made to increase the 230 projects so far, with a total budget of 10.2 billion euros that have been included in the funding of the Recovery and Resilience Fund.

The need for the continuous integration of projects is based on the ambitious goal of YPOIK, which wants all the investments of Greece 2.0 to be completed by the end of 2025. and for the first half of 2026, at the end of which the program is completed, only part of the private investments should be left pending, which will be supported as it is known, from the loans of 12.7 billion.

Acceleration of private investment

Meanwhile, the forthcoming interest rate hikes for the ECB are also pushing for the acceleration of the private investment of the Recovery Fund. YPOIK has warned commercial banks that if they fail to disburse the first tranche of 1.6 billion of the Fund’s loans immediately, the current interest rate of 0.35% (due to negative euro interest rates) will increase.

At the same time, of course, the lending from the commercial banks will increase, which evaluate the investment proposals and will appear as the second financier for 30% of the approved budget of each investment proposal.

However, the interest is already great, since in the special platform of YPOIK 600 investment proposals have been submitted, of which for 20 a final request has been submitted. The total budget of the proposals reaches 700 million euros, which corresponds to TAA loans of 264 million euros. Equity is 223 million euros and trade loans reach 204 million euros.

Review – REpowerEU

Along with all this, the Ministry of Finance is preparing for the mid-term review of the program, while waiting for the regulation of REpower EU. This additional program, which will include projects to address the EU ‘s energy dependence on fossil fuels, will be complementary to the TAA, which will have to be revised in line with the Fund’ s implementing regulation.

YPOIK estimates that for the new program it will absorb up to 5 billion euros from the unallocated loans of TAA. Based on the initial announcements of the Commission, the projects of the “branch” of this Recovery Fund will be able to be financed by redistribution of the funds of the NSRF 2021 -2027.

It is obvious that the double (if not triple if one includes the NSRF) revision is a difficult exercise that should be done quickly and in fact in equally difficult conditions.