Greece: EIB to support EUR 325 million Just Transition investment in lignite mining regions of Western Macedonia and Megalopoli

• Minister of the Environment and Energy and EIB President agree new regional financing initiative
• EIB to back sustainable energy and transport, social housing, skills and environmental investment across Western Macedonia and Megalopoli
• EIB experts to work with Greek partners to share best-practice and assist project preparation and implementation  
• New programme to support local communities dependent on lignite production and industry

Communities across northern Greece and the Peloponnese traditionally dependent on coal and lignite mining, heavy industry and fossil-fuel power generation are set to benefit from up to EUR 325 million new investment and technical best-practice backed by the European Investment Bank, as well as associated grants  provided by the European Union. The new initiative is designed to support the Greek Government’s Just Transition Development Plan.

The new agreement will unlock high-impact sustainable energy, green mobility, social housing, skills and training, and environmental investment and boost employment across Western Macedonia, including Kozani, Florina, as well as Megalopoli in the Peloponnese, in the years ahead.

The agreement was formally signed in Athens earlier today by Kostas Skrekas, Minister of the Environment and Energy and Werner Hoyer, President of the European Investment Bank, in the presence of Christian Kettel Thomsen, EIB Vice President responsible for Greece and energy and President of the Just Transition Committee Kostis Moussouroulis.

“Greece was among the first countries in Europe to support the revised agenda of the EU to reduce by at least 55% its total Greenhouse Gas Emissions by 2030 compared to the levels of 1990. Two years ago Prime Minister, Kyriakos Mitsotakis, announced to the United Nations the country’s flagship reform, the retirement of all lignite fired plants by 2028. Phasing out lignite is the fastest way to reduce CO2 emissions and meet the climate targets of 2030. We are fully aware that such a momentous shift will inevitably pose a number of challenges for the local economies in Western Macedonia and in the Peloponnese which now rely heavily on lignite, as well as in the flexibility of our electricity system. That is why experts from the Greek government and the European Investment Bank have been working tirelessly together to unlock targeted local investment backed by the pan-European Just Transition Mechanism. The new cooperation between Greece and the European Investment Bank agreed today represents a major step in the transition to a new, sustainable economy not just for the areas which rely on lignite but for the whole of the country. It will prepare significant new investment in energy, environment, transport, housing and skills essential to create jobs, upgrade infrastructure and improve the environment in industrial areas of Western Macedonia and the Peloponnese. This will ensure that Greece benefits from new financing backed by the pan-European Just Transition Fund once it is approved,” said Kostas Skrekas, Minister of the Environment and Energy of the Hellenic Republic.

“With the unwavering commitment of the EIB to undertake the role of the key partner in financing and technically supporting the strategic development projects in the transition areas in Greece, we are taking another decisive step forward towards the implementation of the largest plan ever organized in the country, in terms of economic diversification and sustainable local development . A percentage of the cost of those projects to be financed by the EIB loan facility will be subsidized directly from the EU budget, further strengthening the public funding of €1.6 billion already made available for the Just Transition Program. We are ready to submit this Program for approval to the European Commission, with the aim of economically diversifying the country's carbon-dependent continental and island regions. In addition, the recently adopted National Recovery Plan included major land rehabilitation projects in the lignite-mining fields and will be funded with €300 million. At the same time, we have ensured the possibility of providing strong investment incentives, increased by 15% - 25%, compared to what is currently the case, which will mobilize huge private funds in all areas in transition. Europe, being the leader of the global endeavour for a sustainable future, shows the way forward with Greece from Greece,” said Kostis Moussouroulis, Chairman of the Just Transition Steering Committee.

“As the EU climate bank, the European Investment Bank is committed to increasing financial and best-practice technical support for high-impact public investment in regions in Greece and elsewhere in Europe most impacted by energy transition. Greece has taken bold steps to end lignite power generation and the agreement signed today will enable even closer cooperation between Greek public sector partners and the EIB’s dedicated Investment Team for Greece. This will accelerate efforts to identify, implement and finance sustainable investment in industrial areas of Western Macedonia and the Peloponnese in the years ahead. This agreement will ensure that Greece benefits from targeted financing under the pan-European Just Transition Mechanism and maximise the impact of the Just Transition Development Plan for Greece,” said Werner Hoyer, President of the European Investment Bank.

Unlocking local investment to improve competitiveness

The new agreement will directly benefit communities most impacted by the end of lignite and coal mining which are extensively used for power generation and heavy industry in the region.

Western Macedonia and Megalopoli in the Peloponnese have been identified by the Greek government as being regions most impacted by energy transition and facing exceptional social and economic costs.

The operations of the Just Transition Mechanism, which was approved by the European Parliament and the Council in November 2020, have just started in the EU and the first financing for local projects are expected already in 2021 and 2022.

Ensuring that Greece benefits from the pan-European Just Transition Mechanism

The Just Transition Mechanism will back public investment in coal- and carbon-intensive regions in Greece and across Europe and support the transition towards a climate-neutral economy. The overall European facility will include up to €10 billion in loans from the European Investment Bank's and €1.5 billion in grants from the EU budget, to mobilise between €25 and €30 billion of new investment.

Projects to be supported by the Just Transition Mechanism include energy and transport infrastructure, district heating networks, public transport, energy efficiency measures and social infrastructure, and other projects that can directly benefit communities in affected regions and reduce the socio-economic costs of transition towards a climate-neutral Europe by 2050.

Supporting energy transition key focus of high-level EIB Group visit

The new agreement was signed during a three-day working visit to Greece by Werner Hoyer, President of the European Investment Bank, Christian Kettel Thomsen EIB Vice President responsible for Greece and Alain Godard, Chief Executive of the European Investment Fund.

The European Investment Bank is owned directly by the 27 EU member states. In 2020, the EIB Group provided EUR 2.8 billion of new support for high-impact private and public investment in Greece, representing the second largest per capita engagement in the European Union.

The intensified climate action cooperation between the EIB and the Greek Government spans multiple sectors and innovative technologies, including developing the country’s infrastructure that will enable increased private electric vehicles use in Greece, decarbonisation of islands which is key to promoting local sustainable tourism, replacing bus fleets in Athens and Thessaloniki with zero-emission buses and the scaling up of Greece’s circular economy.