The European Investment Bank (EIB), the European Union's long-term financing institution, is providing a total of EUR 175 million in support of investment in renewable energy production and the small and medium sized enterprises (SMEs) in Greece. The three relevant finance contracts will be signed today in Athens by Mr Philippe Maystadt, President of the EIB, and Mr Gerlando Genuardi, EIB Vice-President.
EUR 75 million go to TERNA Energy S.A., with the explicit support of TERNA S.A., for the study, design, implementation and bringing into service of seven wind farms with a total capacity of 144 MWe. Four of the farms are on mainland Greece (Mavrovouni, Krekeza and Rachoula Viotias, as well as Didimos Lofos Rodopis), two are on the island of Evia (Vorina Litharia and Kalogetiki Rahi), and one is on the island of Crete (Lasithi). Construction of the first wind farms is scheduled to start in 2003 and all sites are due to be completed and in full operation by 2006, respecting relevant national and EU environmental requirements.
The project will generate renewable energy for supply to the public grid, replacing fossil fuel-powered generation, in line with national and Union policy on alternative energy supplies and climate change.
The wind power industry in Greece is beginning to see strong growth based on good wind resources available and a stable regulatory regime. Presently some 5% of Greek Total Primary Energy Supply (TPES) is derived from renewable sources and the Government's goal, in line with its commitments under the Kyoto agreement, is to bring it up to 12% by 2010.
The project is implemented by TERNA Energy S.A., the electricity generating subsidiary of TERNA S.A. one of the leading civil construction contractors in Greece, specialised in geothermal, hydro and wind power projects and currently operating a portfolio of four wind farms with a total installed capacity of 40 MW.
As part of its efforts to further develop the utilization of its global loan product, intensifying thereby its support for Small and Medium size Enterprises (SMEs) in Greece, the EIB joins forces with two major Greek Banks, in particular Alpha Bank S.A. (Alpha) and Emporiki Bank Group (Emporiki). Loan signatures amount to a total of EUR 100 million, EUR 50 million of which will be signed with Alpha (out of a total credit approval of EUR 100 million) and another EUR 50 million with Emporiki. Both banks are well known to EIB from previous either similar financings or relevant participations in guarantee syndicates relating to EIB's financing of major infrastructure projects. The EIB funds, provided to Alpha and Emporiki in the form of global loans, will be targeted primarily towards investments in industry, tourism and services carried out by SMEs, as well as small and medium-sized projects in infrastructure, energy, environmental protection, health and education. Both operations are considered strategically important for EIB given their focus on the financing of SMEs in an objective 1 region of the European Union.
The EIB is a lead player in implementing the European Union's priority objectives. In 2002, EIB financing for projects supporting European Union policy objectives totalled EUR 39.6 billion. EUR 33.4 billion went to projects within the EU Member States and EUR 3.6 billion to those in the Accession Countries, while lending in other countries ran to EUR 2.6 billion. To fund these activities, the EIB borrowed EUR 38 billion on the world's capital markets.
In Greece in 2002, the EIB provided a total of some EUR 1.1 billion, focusing on transport, telecommunications, energy as well as urban renewal and development (including environmental improvement and protection).
Lending has concentrated in urban transportation, cultural heritage conservation, urban renewal and development and environmental improvement and protection projects (Olympic Games Athens 2004 project), which absorbed a total of EUR 500 million (47%), transport projects (TENs) for a total of EUR 322 million (30%), telecommunication for a total of EUR 100 million (9%), and electricity transmission and distribution for a total of EUR 150 million (14%).