Project Grecotel-Phaiax Hotels and Resorts

Location:

Greece

Project number:

49685

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

B

Approval date:

04 Sep 2019

Status:

Board Approved

PSD disclosed:

26 Feb 2018

Translated version of this PSD: Greek

Project Description

Provision of senior secured financing of up to EUR 40 million to Phaiax S.A. (the "Company"), a market leader in the Greek hospitality industry. The EBRD financing will consist of (i) a committed amount of up to EUR 25 million to be part of an up to EUR 74 million financing package alongside other Greek commercial banks and international financial institutions and (ii) an uncommitted amount of up to EUR 15 million to finance the Company's future investment plans.

Project Objectives

The Project will (i) support part of the Company's EUR 37 million capex plan for the refurbishment, upgrade and expansion of certain existing hotels, (ii) contribute to the Company's balance sheet restructuring by providing financing of longer maturity which better matches the  Company's cash flow generation and (iii) support the Company's future investment plans.

Transition Impact

This is expected to be a sub-project under the Bank's envisaged Inclusive Tourism Framework for the Eastern Mediterranean and the first sub-project in Greece. TheThe Framework's expected transition impact will focus on two main transition qualities, Inclusive and Competitive. Under the Inclusive quality, the EBRD will support improved access to training and employment opportunities for young people and women in countries which suffer from high youth inactivity and unemployment as well as gender disproportion in equality of opportunity. Under the Competitive quality, investments would support upgrading of hotel facilities and the Bank will try to engage with stakeholders to support stronger backward linkages to local suppliers, notably in agribusiness. More broadly, the framework may also help to
promote more diversified and sustainable tourism models (such as culinary tourism) that generate benefits for the local economies through employment, income and revenue opportunities.

Client Information

PHAIAX SA

Phaiax SA is a market leader in the Greek hospitality industry owning a diversified portfolio of hotels and resorts in strategically located tourist destinations. Phaiax is majority owned and controlled by the N. Daskalantonakis Group of companies which has been active in the Greek tourism business for over 40 years, best known through the Grecotel brand.

EBRD Finance Summary

EUR 25,000,000.00

Total Project Cost

EUR 74,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). Environmental and social issues associated with refurbishment, expansion and operation of the existing hotels can be readily identified and mitigated by adequate mitigation measures. Environmental and Social Due Diligence (ESDD) was carried out by a review of the completed Corporate Environmental and Social Due Diligence (ESDD) Questionnaire and site specific questionnaire as well as a site visit to three hotel facilities (January  2018). The ESDD showed that the Company has adequate environmental and social risk management capacities and is in compliance with Greek environmental and social law.  There are no significant environmental and social issues associated with the Company and the Project.  The Company has HR and Occupational Health & Safety (OHS) policies in line with PR2 and PR4 covering all types of the Company’s employees. There are 1,885 directly hired employees in the Company.  At the peak time of the hotel operations, there are more than 1,500 seasonal workers across the facilities.  The Company has adequate environmental and social risk management capacities and is accredited with Travellife accreditation (www.travellife.org). Travellife is an international sustainability certification scheme in the tourism sector and cofounded by the Eco-innovation creaked by EU. It helps its 1,300 hotel members around the world by improving their environmental, social and economic impacts cost-effectively.  A concise Environmental and Social Action Plan (ESAP) has been developed and agreed by the Company for the Project to address sustainable tourism, construction contractor management and life and fire safety issues.  The Company is installing heat-pumps for its facilities supported by the Government’s policy.  The Company and EBRD are also working to explore further opportunities to save energy and water use. 

The ESDD showed the following.  Travellife accreditation covers solid waste management, water supply and waste water management, energy and water saving, labour issues, stakeholder engagement, supply chain issues among others.  In the Company’s hotels, water comes from its own wells except one case.  Each hotel and resort has its own wastewater treatment plant to treat its wastewater prior to discharge it into the sea.  The wells and on-site wastewater treatment plants are regularly monitored by the authority and operated with official permits. The hotels’ beaches are Blue Flag beaches and sea water is also regularly monitored.  An oil trap is in place for the kitchen wastewater. Solid waste is collected and sent by a licensed company to the municipal landfill. Regarding life and fire safety issues, the hotels complies with Greece's fire code. Its fire fighting equipment is regularly checked, and fire simulation training is carried out. There have been no fire incidents in the past five years.  The project is not associated with significant impacts on biodiversity, cultural heritage, resettlement and economic replacement. The Project hotels are located in the existing resorts. The Company is required to ensure that the Project is in compliance with PRs as well as submit an annual environmental and social report to the Bank.

Technical Cooperation

Technical cooperation under the Inclusive Tourism Framework for the Eastern Mediterranean will contribute to the enhancement of industry practices on inclusion, including youth and gender, as well as backward linkages.

Company Contact Information

George Gyparakis, Consultant to the Management
georgios.gyparakis@grecotel.com
+30 210 3743600
www.grecotel.com
64B Kifissias Ave., 15125, Marousi, Athens, Greece

 

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