Project Description
Investment of c. EUR 10 million in credit linked notes, issued by a newly established securitisation special purpose entity (the "Issuer"), covering the credit risk of the senior mezzanine tranche in a synthetic balance sheet securitisation of a performing mixed loans portfolio, originated by Piraeus Bank S.A., a commercial bank incorporated in Greece (the "Originator" or "Piraeus").
Project Objectives
The project boosts the resilience of a systemic bank in Greece, and i subject to receipt of the ordinary terms and approvals by the competent authorities i will allow Piraeus Bank to achieve a risk weighted assets relief and optimise its regulatory capital requirements, while the anticipated RWA relief will be redeployed to new on-lending to the real economy. Furthermore, the EBRD promotes resource efficiency in the country by requiring Piraeus Bank to allocate funds in the amount of 1.7 times of EBRD's subscription to finance green investments in renewable energy and energy efficiency.
Transition Impact
ETI score: 63
The project delivers transition impact through the Resilient quality, as it will contribute to the optimisation of the bank's capital structure by achieving weighted assets' relief and freeing up lending capacity, and further support the establishment of an innovative instrument in the Greek market, the use of which remains limited to date. The project also supports the Green transition quality and the EBRD's Green Economy Transition ("GET") approach in Greece through Piraeus Bank allocating a multiple of the EBRD investment towards projects, which meet strict GET-eligibility criteria.
Client Information
PIRAEUS BANK SA
The Issuer: A securitisation special purpose entity established in Ireland for the purposes of the synthetic balance sheet securitisation originated by Piraeus.
The Originator: Piraeus Bank is one of the largest systemic banks in Greece in terms of assets, with a market share by assets of c. 24% as of end-September 2022. The bank generates nearly all of its revenues domestically, following a universal banking model covering all financial and banking activities in the Greek market. Piraeus Bank S.A. is a wholly owned subsidiary of Piraeus Financial Holdings S.A., which is listed on the Athens Stock Exchange.
EBRD Finance Summary
EUR 10,000,000.00
Investment of EUR 9,995,609 in credit linked notes
Total Project Cost
EUR 93,922,864.00
Additionality
The Bank's investment will facilitate the establishment of a relatively new instrument in the Greek financial market, where investor appetite remains limited. EBRD's participation promotes higher transaction standards and aims to support further mobilisation of institutional investors in the future, contributing to the deepening of the market. The project also involves standard-setting in the request to allocate EBRD participation proceeds to GET-eligible projects, meeting certain demanding standards and certification requirements. This further helps Piraeus Bank to promote green projects and enhance awareness and deployment of funds in this area and sets a market example for sustainable finance.
Environmental and Social Summary
Categorised FI (ESP 2019). Piraeus is an existing client and well known to the EBRD through previous exposures. Under the existing exposures, Piraeus is in compliance with the EBRD's Performance Requirements 2, 4 and 9. Piraeus will be required to continue to comply with these PRs, including the expanded E&S Exclusion List and new Referral List as introduced with ESP 2019; implement EBRD's applicable E&S Risk Management Procedures, and continue to submit annual environmental and social reports to the EBRD. The underlying securitised loan portfolio, guaranteed by EBRD, should be subject to Piraeus's ESMS, and the allocated multiple amounts should be reviewed and monitored in line with the requirements of PR9 and Piraeus' ESMS. Any potential renewable energy projects under the green allocation will need to follow the E&S Eligibility Criteria for hydro, wind, solar, bioenergy and geothermal projects, as applicable. Any potential solar sub-projects would be managed in line with 'The Proposed Management Approach for Solar Supply Chain Risk Management' and any subsequent guidance developed under that approach. The project is consistent with the GET approach and the GET share is 100%, and up to 1.7x of EBRD's investment will be allocated to GET-eligible projects. The Project has a defined use of proceeds and is determined Paris aligned based on the application of the Bank's Paris alignment methodology for indirect finance.
Technical Cooperation and Grant Financing
None.
Company Contact Information
Xenofon Damalas
investor_relations@piraeusholdings.gr
(+30) 210 333 5818
https://www.piraeusholdings.gr/en/
Amerikis 4, 105 64, Athens, Greece
PSD last updated
26 Jan 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
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General enquiries
Specific enquiries can be made using the EBRD Enquiries form.
Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.
