Equity investment of EUR 75.15 million in Public Power Corporation S.A. (the "Company" or "PPC"), the Greek state-owned energy utility. The investment constitutes part of a EUR 1,350 million share capital increase of PPC. This is envisaged to reduce the state's shareholding from 51% to a minority position of around 34%.
The operation will enable the Company to i) accelerate its expansion into renewable energy, digitalisation and e-mobility and ii) support the privatisation of PPC. Both elements further support one of the most ambitious green energy transition and corporate transformations in Europe, that includes an ambitious decarbonisation pathway aiming to transform PPC from a heavily coal dependent to a modern green, digitalised utility.
ETI score: 68
The expected transition impact of the project is Green, due to the CO2 savings from investments in renewable energy capacity, and Competitive, due to the state's significant reduction in shareholding and ceding of control which will allow PPC to operate as a private company.
PUBLIC POWER CORPORATION SA
Public Power Corporation S.A. is Greece's incumbent power utility, the largest electricity generator and the principal supplier of electricity in the country. It is listed on the Athens Stock Exchange and is rated BB- by Fitch (rating initiation, December 2020) and B+ by S&P (June 2021).
Total Project Cost
The Bank is able to provide comfort to private investors as well as stakeholders during a transition period towards a privatised company. PPC is also seeking EBRD expertise on setting gender equality standards in line with international best practice.
Environmental and Social Summary
Categorised B (2019 ESP). The Project is an equity investment which will expose the Bank to all operations of the Company including its carbon footprint based on use of lignite. The share capital increase will support PPC's ambitious sustainability and renewable energy strategy. The use of proceeds set out in the framework agreement to be signed with PPC will explicitly exclude coal and mining assets, as well as category A projects, from receiving EBRD financing and will include a covenant that EBRD's proceeds shall be applied exclusively toward investment in renewable energy projects.
ESD considered the ESDD conducted on the Company in 2020 as part of VISP PPC Liquidity Response (BDS20-072) and updated as part of Project Primavera (BDS21-022). The past ESDD included a review of publicly available documentation, as well as remote meetings with the Company's EHS and CSR team to understand PPC's plans to comply with current and future EU legislation. It was concluded that PPC has sufficient Environmental, Health and Safety management systems and capacity to implement the Bank's E&S requirements.
The ESDD included a review of the Company's procurement policies and determined that the Company is implementing supply chain assessments. Going forward the Company will undertake additional supply chain risk assessments and will adhere to the EU guidance on due diligence for EU business to address the risk of forced labour in their operations and supply chains.
A key challenge for the Company will be associated with compliance with the new EU BAT Conclusions at the existing power plants, reducing its carbon footprint and increasing the share of renewable energy generation. The Company is making efforts to address this, and has made strong public commitments to implementing a decarbonisation policy. This will include the decommissioning of 3.4 GW of lignite assets by 2023 and the remaining 0.6 GW by 2025, at the latest. The decommissioning and planned investments will significantly reduce air pollution from the Company operations.
A review will be undertaken with the next 6 months, to verify overall compliance with ESAPs, the Bank's E&S requirements as well as EU environmental standards.
The Bank will monitor the implementation of this project jointly with the VISP PPC Liquidity Response and Project Primavera, and continue to engage with the Company.
Technical Cooperation and Grant Financing
Company Contact Information
+30 210 529 2153
Public Power Corporation S.A., 30, Halkokondili str., 104 32 Athens, Greece
PSD last updated
10 Nov 2021
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