Category: Greece

The growth rate of public-private partnerships (PPPs) in Greece, which commenced almost four years ago and retained the same dynamics throughout the COVID-19 era despite the internationally unfavorable economic environment, remains undoubtedly impressive.

As of early March 2022, the Interministerial PPP Committee has approved five additional regional infrastructure projects with a total value of EUR 425.2 million, including the construction and operation of an integrated waste management system in Santorini, one of the most popular tourist destinations in Greece. This adds to a tally of more than 60 currently active PPP projects with an estimated value of EUR 5 billion, spanning almost all sectors of infrastructure from judicial buildings and university campuses to broadband networks and smart city projects, to highways and dams.

Nevertheless, there are certainly challenging objectives that the market is currently called to fulfill, such as the avoidance of lengthy tender procedures, bridging the maturity gap – which occurs as many projects have not reached yet a satisfactory maturity level – as well as limited human resources, taking into account that the successful implementation of the PPP model presupposes the existence and utilization of specialized human resources both in the public and private sectors.

PPPs in Greece are governed by Law No. 3389/2005 (the PPP Law), which sets out a concise and comprehensive legal framework for awarding, contracting, and implementing PPPs. Since its implementation, the PPP Law has significantly simplified and clarified the procedures and rules applicable to PPPs and thus enhanced legal security for private investors.

The PPP Law establishes two administrative state bodies, the Interministerial PPP Committee, which approves or rejects PPP projects, and the Special Secretariat for PPPs, which plays a key role in the overall centralized process, serving as a specialized and market-oriented task force and providing support to the Interministerial PPP Committee and to public entities. In practice, the Special Secretariat coordinates all the PPP projects that are promoted or planned by public entities, evaluates new proposals, supports contracting authorities in preparing the award of contracts, and monitors the overall projects’ implementations.

Construction projects fall within the scope of the PPP Law if they involve building public infrastructure of a value not exceeding EUR 500 million, by using capital and resources mainly secured by private entities, which, at the same time, assume key risks associated with the financing, construction, availability of, or demand for the project. Private entities are eligible to participate in PPP projects only through special purpose vehicles, i.e., limited liability companies set up solely for the purposes of implementing the project. The PPP Law sets minimum content requirements for the PPP contract to ensure that the contracts include all terms outlined by the public authority in the tender documents published during the contract award procedure and, at the same time, resolves several legal issues which would otherwise require special regulation (e.g., expropriation, environmental and archaeological permits, connection to public utility networks).

Tender processes are essentially governed by the rules set out in EU Directive 2004/17 (on coordinating the procurement procedures of entities operating in water, energy, transport, and postal services) and EU Directive 2004/18 (on coordination of procedures for the award of public work contracts, public supply contracts, and public services contracts), which provide safeguards of transparency, and fair and equal treatment during all stages of public procurement. Practice has confirmed that most contracting authorities opt for open procedures via a “competitive dialogue” in two phases. Consequently, according to the PPP Law, the criterion of the lowest price is not applicable, and the contracts are awarded on the basis of the most beneficial financial offer. Most projects present a contractual term of 30-32 years, including a two-three year construction period.

Practice has also shown that tender procedures can often prove time-consuming, especially when lengthy legal disputes arise between the bidders during the pre-award phase of the procurement process. PPPs have been heavily criticized due to time inefficiency and certain cases of misimplementation. Several ongoing PPP projects are yet to be awarded and enter the construction period. 

Another much discussed and vital factor for the further growth of the market is the funding of the private contractors by the European Investment Bank, as was the case back in February with the projects for building student campuses for three regional universities (Crete, Thrace, and Thessaly).

In any case, it is evident that PPPs will remain key to Greece’s economic development ambitions for the years to follow and that the need for specialized and high-quality professionals will keep increasing.

By Alexandros Katsantonis, Head of Public Procurement and PPP, Drakopoulos

This Article was originally published in Issue 9.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Kyriakides Georgopoulos has advised Danone SA and Numil Hellas SA on their corporate restructuring, with Numil Hellas absorbing Danone’s business in Greece.

Danone is an American-French multinational food-products corporation based in Paris. It was founded in New York and Barcelona and is listed on Euronext Paris. Numil Hellas is a baby food product company located in Greece, Spain, and Turkey. Both Danone SA and Numil Hellas SA are Danone Group subsidiaries.

According to KG, “the merger was completed on May 5, giving effect to the implementation of the group’s strategic business planning by resulting in significant benefits of synergy, economies of scale, as well as optimization and expansion of activities.”

KG’s team included Partners Irene Kyriakides, Panagiotis Pothos, and Ioanna Kyriazi and Senior Associates Ioanna Barmpa and Efthymia Pragianni.

Kyriakides Georgopoulos could not provide further information on the deal.

A number of jurisdictions provide residency or even citizenship options against certain investments. Greece was one of the last countries to introduce a similar offering. An EU member state as well as a country of the Schengen area, Greece embodies the rule of law and the democratic principles of Western democracies, all in idyllic surroundings.

The initial success of the Greek investment residence program triggered additional reviews of the respective provisions, in order to cover a wider range of willing investors in times of financial growth as well as in times of geopolitical uncertainty.

Five-Year Residence Permit With Subsequent Renewals

Third-country nationals and immediate family members are granted a five-year residence permit provided that they engage in any of the following investments – with the option of equal five-year renewals, should the requirements still be fulfilled:

Real estate investments – full ownership of real estate in Greece with a value of EUR 250,000, either in person or through a fully owned legal entity established in Greece or another EU member state. The residence permit is also granted to persons who have concluded a long-term contract for a complex tourist accommodation or a time-share leasing agreement with a total contract rent of EUR 250,000. This type of residence permit is also granted to those who have acquired full ownership of real estate of EUR 250.000 in value as a result of parental benefit or heritage, securing the respective residence right to descendants of the original applicant in the long run.

Broader investment activity, with positive impact on growth & the economy – an investment that will have a positive impact on national development and the economy, following a respective suggestion by the Directorate of Foreign Funds of the Ministry of Economy, Infrastructure, Shipping, and Tourism. The minimum amount of the investment, in order to be granted the permit, amounts to EUR 250,000, according to a ministerial decision that further determines the number of eligible residence permits, depending on the amount of the investment.

Investments in securities or cash deposits – which variously include: (1) capital contributions, amounting to a EUR 400,000 minimum, to a company established in Greece for the acquisition of shares in a share capital increase, or bonds to be listed in regulated markets, or multilateral trading mechanisms operating in Greece; (2) capital contributions in a capital increase, with the same minimum, to a Real Estate Investment Corporation with the scope to invest exclusively in Greece; (3) capital contributions, with the same minimum, to a Business Holdings Capital Company or to a Mutual Fund of Business Participations for the acquisition of shares exclusively in Greek companies; (4) Greek government bonds, with a EUR 400,000 or above acquisition value and a remaining duration, at the time of purchase, of at least three years, through a credit institution established in Greece that is also their custodian; (5) term deposit with the same minimum to a Greek credit institution, of at least one year duration, with a permanent renewal order; (6) shares, corporate bonds and/or bonds of the Greek state that are listed in regulated markets or multilateral trading mechanisms operating in Greece, with an EUR 800,000 or above acquisition value; and (7) shares with an acquisition value of EUR 400,000 or more in a mutual fund established in Greece or another country aiming to invest exclusively in shares, corporate bonds, or Greek government bonds listed in regulated markets or multilateral trading mechanisms operating in Greece.

Ten-Year Residence Permit With Subsequent Renewals

A ten-year residence permit is granted to up to ten third-country nationals, and their family members, who are deemed essential for implementing strategic investments, following a decision by the Interministerial Committee on Strategic Investments. This type of residence permit is subject to quotas that vary with the specific type of investment. Priority is given to low-carbon or instrumental digital investments, which have the lower threshold of EUR 10 million.

In a highly competitive forum shopping area, the Greek offering is already successful. The low entry requirements, lack of hidden charges, and wide variety of investment options for the applicant to choose from, as well as the income margin, provide the competitive edge. Additionally, the top-tier benefits associated with residing in Greece or traveling within the EU and Schengen area establish Greece as a favorable investment visa destination.

Prior to applying for an investment visa, the sanctions and restrictions regime – as currently in force – should always be considered.

By Eirinikos Platis, Partner, Platis Anastassiadis & Associates, EY Law

This Article was originally published in Issue 9.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Lambadarios Law Firm has advised Athens Water Supply and Sewerage Company (Eydap) on an international tender procedure for the award of a five-year services agreement regarding the operation and maintenance of Psyttalia Wastewater Treatment Plant (WWTP).

The agreement has been awarded to the joint venture “Aktor SA (40%)-Avax SA (40%)-Ergotem SA (20%),” and includes, among others, interventions for the modernization of the facility as well as for its functional and energy upgrade, for a total consideration of EUR 174.9 million, with the option right for an annual extension EUR 34.3 million.

Eydap is an Athens Stock Exchange-listed company, serving over 4 million customers. The company operates in the water supply, sewerage, and wastewater treatment sectors. The length of water pipelines is 14,000 kilometers.

WWTP is an environmental project for Greece. The project includes a wastewater treatment plant in the greater Athens area.

The Lambadarios Law Firm team included Partner Yannis Kourniotis and Associate Magdalini Christina Vlachou Vlachopoulou.

Lambadarios Law Firm did not respond to our inquiry on the matter.

Former Alpha Bank Chief Legal and Governance Officer Nikos Salakas has re-joined Koutalidis as a Partner and Head of the firm’s Banking and Finance practice.

Specializing in banking and finance, Salakas worked for Alpha Bank between 2019 and 2022 as Chief Legal and Governance Officer and a Member of the Executive Committee. Before moving in-house, he was a Partner with Koutalidis, having spent almost 20 years with the firm, from 1999 to 2019.

“We are confident that Nikos with his deep knowledge, transaction experience, work ethic, and a solid footprint in the legal market shall be key in pursuing our goal always to have the Koutalidis law firm in the forefront of the legal industry,” Koutalidis Managing Partner Nikos Koritsas commented. “We are really excited to welcome Nikos back to our Partnership.”

Originally reported by CEE In-House Matters.

Despite current geopolitical challenges and the related inflation and price hikes, the current situation in Greece is much better compared to the COVID-19 crisis, with increasing interest in the country’s hospitality sector, according to Drakopoulos Partner Michalis Kosmopoulos.

“The last couple of weeks’ main discussion topics have been the geopolitical developments adding complexity to the issues faced by Greece,” Kosmopoulos says. “On a more practical note, inflation remains the main challenge, affecting both personal and corporate budgets.” According to him, at the moment, “price hikes are visible in many areas of everyday life, ranging from energy to the food sector. In the long run, this might have a major impact on law firms’ work.”

Still, Kosmopoulos points out that the overall situation is much better compared to the last major crisis. “I would not compare the present challenges to the ones during the pandemic,” he says. “When COVID-19 broke out, we received e-mails from clients saying they were limiting their legal budget to almost zero, to save their companies. At the moment, even though the business sector is price-sensitive, there is cause for optimism,” he notes, adding that it depends on how the Ukrainian crisis evolves in the next few months.

Aside from that, Kosmopoulos believes that investors’ interest in Greece has been increasing since the stabilization of COVID-19 last year. “Greece is highly dependent on tourism and, with the growth of interest in the hospitality sector, we are highly optimistic that we are going back to the 2019 numbers of around 30 million tourists per year in the country,” he says. In addition, Kosmopoulos highlights that this is especially visible in the Athens area, “where new hotels have been popping up everywhere in the past few years.” Overall, he notes that transactional activities remain very high.

Kosmopoulos adds that the “legal sector still faces a long-standing issue: delays in the justice system. This has been an ever-lasting problem, without any specific solutions so far. The Civil Procedure Code has already been reformed a few times, with lackluster results so far.” Hiring more judges could be one solution, he ventures.

That said, Kosmopoulos highlights that there has been a positive development in Greece related to the restructuring of the IP office: “Ten days ago, the trademark registry moved from the supervision of the Ministry of Development to the Patent Office, covering all IP-related things with the exception of copyright.” According to him, this imposes a lot of challenges in merging all operations together. “I hope there is a good project plan in place and we won’t face significant delays in processes,” Kosmopoulos concludes.

Bernitsas Law, working with Baker McKenzie, has advised Gastrade on the EUR 280 million financing and development of the Alexandroupolis independent natural gas system project.

According to the firm, the Alexandroupolis INGS comprises an offshore floating unit for the reception, storage, and re-gasification of liquified natural gas, with a total capacity of up to 170,000 cubic meters, and a subsea and onshore gas transmission pipeline through which gas will be shipped into the Greek national natural gas system and onwards to final consumers.

Gastrade is a Greek utility company that develops, exploits, operates, and manages natural gas systems.

The project’s inauguration on May 3, 2022, was attended by the Prime Ministers of both Greece and Bulgaria. “It will secure new natural gas quantities for the supply of the Greek and Southeast European markets, enhancing the security of supply in Greece and the Balkan markets, improving the Greek national natural gas system and the regional and trans-European gas networks, and contributing to the achievement of Greece’s environmental targets,” Bernitsas Law informed.

The Bernitsas team was led by Managing Partner Panayotis Bernitsas and included Partners Yannis Seiradakis and Athanasia Tsene and Counsel Dionysis Flambouras.

Bernitsas Law did not respond to our inquiry on the matter.

Souriadakis Tsibris has advised Goldman Sachs on establishing a branch in Athens.

Goldman Sachs is an American multinational investment bank and financial services company headquartered in New York City.

Souriadakis Tsibris did not reply to our inquiry on the matter.

The Lambadarios law firm has advised the Hellenic Republic Asset Development Fund on the first stage of the new concession tender for the Attiki Odos motorway.

The law firms advising the bidders reportedly included: Clifford Chance and Koutalidis for Spain’s Abertis Infraestructuras from Spain; Zepos & Yannopoulos for the Brisa, Auto Estradas de Portugal, and Rubicone Bidco consortium; Potamitis Vekris for the consortium of Macquarie and Fincop Infrastructure, a vehicle with the participation of the Copelouzos Group; Karatzas and Partners for the Aktor Concession, Avax, and Ardian venture; and Dimitrakopoulou and Partners and the KLC law firm for the GEK Terna and Igneo group (through FS Ark Holdco) consortium.

The Attica Tollway is a motorway extending along 70 kilometers, as the ring road of the greater metropolitan area of Athens. According to Lambadarios, “the first stage of the tender has been completed with tremendous success, given that a wide range of renowned national and international players have expressed their interest in the asset.”

Lambadarios’ team was led by Partner Yannis Kourniotis.

White & Case has advised Energean Oil & Gas S.A. on the provision of a loan from the Black Sea Trade Development Bank, which is supported by a guarantee and subordinated loan from the Greek State. Watson Farley Williams reportedly advised BSTDB on the deal.

Energean is a wholly-owned subsidiary of Energean PLC, a London-based independent oil and gas company. 

According to White & Case, “Energean will use the loan to fund its investment plans, in particular the development of the Epsilon and Prinos fields, including upgrades to the existing Prinos complex. It will also use the loan to support its opex and working capital needs.”

White & Case’s London-based team working on the deal was led by Partner Jason Kerr, with support from Associates James Foo and Kian Newlyn.