EUR 10 million loan from The European Investment Bank for Fire Services inaugurates a new era in infrastructure investments in Greece, modeled as Public Private Partnerships.
The Hellenic Minister of Economy and Finance, Mr Yannis Papathanasiou, stated: “This is an important day, as a reform that we started in September 2005 is now being enacted. The construction and maintenance of seven new infrastructures for the Greek Fire Service is the first project that gives "flesh and bone" to the law on Public-Private Partnerships. We are particularly pleased that the reform for PPPs is entering its final phase of implementation, helping to develop and underpin the real economy in this period of unprecedented international economic crisis that we are experiencing. And it is important that the financing of this project has been ensured despite the credit crisis and on even better terms for the public sector than those initially foreseen. The project, now entering its final phase, is the first in a series of 52 PPP projects, totalling EUR 5.7 billion, which will enable the creation of 327 new infrastructures - mainly social infrastructures - throughout the country. To date, 15 tendering procedures have been launched, for a total of EUR 1.5 billion. In the course of 2009, at least one project will be put out to tender every month and, in all, projects totalling EUR 1.7-2 billion will be tendered during the year. At the same time, other projects are also entering their final implementation phase this year. The contractor for the second PPP project - the headquarters of the municipalities of Korinthia and Trikala, for a total cost of EUR 54 million - is due to be appointed at the end of April”.
EIB Vice-President Plutarchos Sakellaris stated on the occasion: “With this loan a new phase starts for Public Private Partnerships in Greece. In we financed the new Athens Airport as first PPP project in Greece. Since then the country has financed a series of flagship large scale infrastructure projects through PPPs. Over the last four years, we worked closely with the Greek authorities to expand the PPP model to smaller infrastructure projects. This new loan for fire stations throughout the country is the culmination of our common efforts. It opens the way for a number of new projects to come”.
The project includes the design, construction, insurance, maintenance and operation of seven fire department buildings in Alexandroupoli, Giannitsa, Veroia, Lefkada, Kalavryta, Gargalianoi and Thessaloniki. The seven new buildings of an average 1-2 000 sq. m floor area are part of a wider programme to improve the fire fighting physical infrastructure in Greece. This will in turn improve also its operating capacity, and have positive spill-over effects on security and the environment, as they will be useful for fighting forest fires.
The investment is promoted by the Hellenic Public Real Estate Corporation SA (KED), whose mission is to manage the Greek State's property portfolio with the main objective of maximising its value. The loan goes to FIRE BRIGADES PARTNERSHIP SPECIAL PURPOSE SA, a special purpose company established by the Gatzoulas-Kourtidis Consortium, who have been awarded the concession.
PPP's in the EU are increasingly seen by the Member States to be both valuable and necessary as an effective means of involving the private sector further in the provision of public services and infrastructure under public procurement practices. Two principal aspects justify increased confidence in the future role of PPPs in the EU: the fiscal policies being pursued by the EU Governments under EMU imply the existence of real long-term constraints on the traditional financing of infrastructure while it is generally accepted that substantial benefits can be achieved through private sector efficiencies. The future development of such structures should enable the private sector to provide not only better access to capital but also greater managerial and technical resources, so that to take on larger and more complex tasks than the public sector can handle.
The EIB, whose primary role is to promote convergence and European integration by its long-term lending, is giving special emphasis to the development and support of PPP's as an additional financial instrument to support capital investment in economic and social infrastructure. The EIB’s role is two-fold in this process of developing and financing PPPs. First, as the major specialist infrastructure financing institution within the European Union, it has a strong policy interest to facilitate greater investment in infrastructure by the private sector so as to meet the needs of the economy. Secondly, EIB is prepared to use its own considerable financial resources to expand, in co-operation with commercial banks, capital markets as well as private equity the resources available for infrastructure investment as well as social health, education and urban regeneration.
Note to editors:
Total EIB lending rose by 21 percent in 2008 to EUR 57bn, compared to EUR 48bn in 2007. Loan signatures rose sharply towards the end of the year, reflecting the EIB's swift response to help underpin economic recovery at the request of the European Union's Member States. In Greece in 2008, the EIB provided a total of EUR 1 165m in loans, 54% up from the EUR 755mn 2007 figure.
EIB’s first loan for a PPP project was for the Great Belt Link bridging Denmark and Sweden in 1990. Since then the EIB has provided a total of some EUR 30 billion for PPP financing mainly in the European Union. Of this amount EUR 3 billion was for PPP projects in Greece: Athens International Airport Eleftherios Venizelos, the bridge Rion-Antirion, Attiki Odos, the Thessaloniki Submerged Tunnel, and the motorways Korinthos-Tripoli-Kalamata and Elefsina-Korinthos-Patra-Pyrgos-Tsakona.