Category: Greece

Zepos & Yannopoulos has advised Ayvens Group, Leaseplan, and ALD on the merger of the Greek subsidiaries effected through the absorption of ALD Automotive by Leaseplan Hellas.

Ayvens Group is the mobility part of the Societe Generale Group.

According to Zepos & Yannopoulos, “the merger constitutes a landmark transformation in the local automotive industry since it has unified two of the largest vehicle fleets in Greece under a single automobility brand, Ayvens Greece.”

The Zepos & Yannopoulos team included Partners Athina Skolarikou, Manolis Zacharakis, Alex Karopoulos, and Diana Tsourapa and Senior Associates Sofia Tzianoumi and Gina Dimitropoulou.

Zepos & Yannopoulos did not respond to our inquiry on the matter.

Zepos & Yannopoulos has advised UCI Greece Credit and Loans Receivables Servicing Company on the renewal of the company’s operating license by the Bank of Greece.

The Zepos & Yannopoulos team included Of Counsel Kitty Fragalexi, Associate Dimitris Mekakas, and Junior Associate Katerina Chalka.

Bernitsas, working with Linklaters, has advised Cerberus on the acquisition and financing of a EUR 1 billion asset from Intrum.

Cerberus Capital Management is an American alternative investment firm with assets across credit, private equity, and real estate strategies. 

Intrum is a credit management services company.

According to Bernitsas, “the transaction involves over 10,000 portfolios with a nominal value of EUR 33 billion and a book value EUR 1 billion, as of September 30, 2023, across 13 European jurisdictions. The transaction is structured as a joint venture partnership, in which Cerberus will hold a 65% ownership stake and Intrum will hold a 35% ownership stake. The joint venture partnership has also entered into an agreement with Goldman Sachs to provide financing for the transaction.”

The Bernitsas team included Partner Athanasia Tsene and Associates Maria Cheimona, Angeliki Chlivinou, and Sildia Fotopoulou.

Bernitsas did not respond to our inquiry on the matter.

Editor’s Note: After this article was published, DVLaw announced that it advised Goldman Sachs on the financing granted to Cerberus Capital Management. The firm’s team included Co-Managing Partner Yiannis Palassakis, Partner Irene Anyfanti, Counsel Dimitris Markakis, and Associate Maria Vamvaka.

Bernitsas has advised BMW Hellas Trade of Cars SA on the successful spin-off of its vehicles leasing sector.

According to the firm, following the spin-off it contributed this division to its newly established wholly-owned subsidiary, BMW Hellas Leasing Single Member Private Company.

BMW Hellas Trade of Cars is a member of the BMW Group, one of the largest manufacturers of premium cars and motorcycles and a provider of premium financial and mobility services in the world.

The Bernitsas team included Partners Evi Kitsou and Tania Patsalia, Counsel Maria Kloni, and Associate Martha Ntounou.

The renewable energy sector has seen significant growth and transformation over recent years, and Greece is no exception. With almost 45% of its total energy production coming from Renewable Energy Sources (RES) like solar and wind power, Greece is experiencing a shift towards more sustainable energy solutions.

This article delves into the evolving landscape of corporate Power Purchase Agreements (PPAs) in Greece, highlighting market trends, legal framework, and key considerations for structuring and negotiating these agreements.

Market trends and developments

In response to the green transition, the Greek energy market is experiencing a progressive transition from state support schemes to corporate PPAs. Historically, the Greek government promoted RES through state support mechanisms, such as the feed-in tariff model established by Greek Law 3468/2006. This model provided guaranteed prices and long-term agreements to RES producers, effectively shielding them from market risks and encouraging investment in renewable technologies.

However, the high financial cost of these schemes, coupled with the Greek debt crisis, led to significant reforms in 2014 and the introduction of the feed-in premium model in 2016. The feed-in premium model, aligned with European Commission guidelines, requires RES producers to participate in the electricity wholesale market, selling generated electricity at market prices while receiving a premium if market prices fall below a reference price.

This shift, along with the introduction of the Target Model and technological advancements, has paved the way for the development of corporate PPAs.

Characteristics of corporate PPAs

Corporate PPAs are typically long-term agreements, ranging usually from 10 to 20 years, between RES producers and various off-takers, such as utility companies, electricity suppliers, aggregators, industries, or major consumers. These agreements are not regulated by law, allowing parties to freely negotiate their terms. Corporate PPAs provide RES producers with long-term predictable cash flows, covering investment costs and ensuring reasonable profitability, which is crucial for project bankability.

To encourage the conclusion of corporate PPAs, the Greek government has implemented several measures:

• Grid connection priority: RES producers with corporate PPAs covering at least 80% of generated electricity for a minimum of 8 years receive grid connection priority (category Β). Recent legislative amendment (March 2024) grants absolute grid connection priority to RES projects supplying electricity to farmers and heavy industrial consumers.
• Suspension and termination options: Under specific conditions prescribed by law, RES producers can suspend feed-in premium PPAs or terminate feed-in tariff and feed-in premium PPAs to enter into corporate PPAs.

Types of PPAs

Physical PPAs vs. Virtual (Financial) PPAs

Physical PPAs involve the physical delivery of power from the generator to the buyer within the same network, often facilitated by a third-party energy trading firm.

Virtual PPAs are financial contracts where the generator sells energy to the buyer at a variable spot price injecting the sold energy to the network. The difference between the market price and the agreed PPA price is settled between the generator and the buyer, acting as a financial hedge against market price fluctuations.

Fixed Volume PPAs vs. Variable Volume PPAs

Fixed Volume PPAs require the generator to deliver predetermined production volumes at specified intervals for a fixed price.

Variable Volume PPAs involve the buyer purchasing all or a significant percentage of the electricity actually produced at a fixed price, with no target production volume imposed on the generator.

Key terms and risk allocation in corporate PPAs

Development risk: This involves the risk of the renewable power plant not being constructed or commissioned on time. Off-takers aim to shift this risk to developers, who, in turn, ensure that deadlines include buffers for delays not attributable to them. Lenders seek to minimize the risk of PPA termination before project commissioning.

Tenor risk: This pertains to the risk associated with being locked into above or below market prices over the contract term. Developers consider market price forecasts and lender requirements to determine the PPA term, while off-takers might seek exit mechanisms to mitigate long-term pricing risks.

Price risk: Price risk involves losses due to market price variations. Developers prefer long-term predictable prices, whereas off-takers favor flexible pricing to mitigate risks. Lenders prioritize project cash flows sufficient for debt repayment, often preferring fixed prices.

Credit risk: The off-taker’s creditworthiness is critical for project viability and debt repayment. Developers and lenders mitigate this risk by requiring credit support from the off-taker, though off-takers may resist such requirements.

Performance risk: This risk concerns whether the renewable power plant performs as expected. Off-takers seek performance guarantees and exit mechanisms for under-performance, while developers aim for achievable guarantees and mitigation rights. Lenders align with developers on this risk.

Volume risk: The volume of electricity to be purchased can only be estimated, influenced by factors like meteorological conditions. Many buyers want minimum volume commitments, while developers prefer variable volume PPAs to avoid production volume obligations.

Change in law and regulatory risk: Changes in law can impact the balance of benefits or risks under a PPA. Off-takers typically resist bearing this risk, while developers seek fair risk allocation, particularly where the PPA is the primary revenue source. Lenders ensure that such changes do not undermine project revenues.

Force majeure risk: Force majeure events can delay project construction or operation, impacting production. Parties agree on risk allocation mechanisms, with off-takers wanting specific definitions and termination rights, while developers seek broader definitions and insurance covers. Lenders align with developers on this risk.

Termination clauses: Termination clauses are crucial for lenders as PPAs secure financing. Developers aim to exclude early exit clauses or negotiate termination payments and exclude default events due to third-party non-performance. Lenders seek step-in rights to remedy defaults before termination.

Conclusion

The corporate PPAs market in Greece is maturing, with an expected increase in agreements as government measures and banking willingness to finance RES projects continue. Future measures, such as state guarantees covering price risk and a special platform for corporate PPAs in the Hellenic Energy Exchange, are under discussion to further encourage these agreements. With an estimated 30,000 – 40,000 corporate entities eligible to enter into corporate PPAs, these complex agreements must address diverse stakeholder interests and allocate inherent risks effectively.

Expert legal advisors play a pivotal role in drafting documentation to safeguard stakeholders’ interests and ensure project viability. Your Legal Partners has established a dedicated team that specializes in Renewable Energy Projects (M&A, Project Finance, Corporate PPAs), comprising legal experts from various practice areas within the firm, pooling the knowledge to address the particularities of the renewable energy market.

By Prokopis Linardos, Partner, Your Legal Partners

Koutalidis has advised Alpha Services and Holdings on its EUR 500 million issuance of tier 2 notes due 2034 under its EUR 15 billion medium-term note program.

According to Koutalidis, “the issue of the notes, which are listed on the Luxembourg Stock Exchange – EuroMTF Market, received strong demand from more than 130 investors, with 76% of the total issue placed outside Greece.”

In 2023, Koutalidis advised Alpha Bank on its partnership with UniCredit in Greece and Romania (as reported by CEE Legal Matters on November 16, 2023) and has also advised Alpha Holdings and Services on its EUR 400 million note issuance (as reported by CEE Legal Matters on February 15, 2023).

The Koutalidis team included Partners Ioannis Kaptanis and George Naskaris.

 Koutalidis did not respond to our inquiry on the matter.

Your Legal Partners has advised Autohellas on its partnership with XPeng.

Autohellas operates in the car import and distribution sector.

XPeng is a Chinese electric vehicle manufacturer.

According to Your Legal Partners, the partnership aims to “introduce high-tech Smart EVs to the Greek market starting July 2024.”

The Your Legal Partners team included Partner Katerina Christodoulou and Senior Associate Evgenios Fiflis.

Papapolitis & Papapolitis has advised Dukes Education on its expansion into the Greek Market with the acquisition of the International School of Athens.

The International School of Athens operates the International School of Athens and Melina’s Kindergarten in Athens. Dukes Education is a UK-based operator of nurseries, schools, and colleges in the UK and internationally.

The Papapolitis & Papapolitis team included Partner Evi Tsilou and Senior Associates Anna Pavlaki, Erna Kritikou, and Athanasia Stefanidou.

Papapolitis & Papapolitis did not respond to our inquiry on the matter.

Bernitsas, working with Simmons & Simmons and Latham & Watkins, has advised Abu Dhabi Future Energy Company (Masdar) on an agreement with Gek Terna and other shareholders to acquire Terna Energy. Reed Smith and Potamitis Vekris advised Gek Terna Group.

According to Bernitsas, “the acquisition price represents an equity valuation of EUR 2.4 billion and an enterprise value of EUR 3.2 billion.”

Abu Dhabi Future Energy (Masdar) is a UAE-based clean energy company.

Terna Energy is a Greek renewable energy group listed on the Athens Exchange and a subsidiary of Gek Terna, a construction and projects company in Greece.

The Bernitsas team included Partners Nikos Papachristopoulos, Yannis Seiradakis, Athanasia Tsene, Marina Androulakakis, Maria Nefeli Bernitsa, and Tania Patsalia, Counsels Eleni Stazilova and Maria Kloni, Senior Associates Fotini Karra, Stella Papakosta, and Maria Sofia Sfika, and Associates Chrysa Andressaki, Angeliki Chlivinou, Odysseas Fokas, Katerina Fotopoulou, Sildia Fotopoulou, Manto Karamanou, Konstantina Karveli, Niki Nisotaki, and Marinos Shiapanis.

The Potamitis Vekris team included Partners Vassilis Stergiou and Aspasia Malliou and Senior Associate Eleana Baya.

The Reed Smith team included Londond-based Partners Panos Katsambas and Delphine Currie and Counsel Matt Bowen.

Chronic delays and procedural inefficiencies are key issues plaguing Greece’s judicial system, according to Bahas, Gramatidis & Partners Deputy Managing Partner Dimitris Emvalomenos, despite past and recent changes aimed at improving legal proceedings.

“The Greek judicial system has suffered significantly over the years from delays,” Emvalomenos begins. “It’s a lengthy and cumbersome process to bring proceedings in Greece. Despite having many judges, the courts are few, and the procedures prevent immediate access to justice. This has been a persistent problem, with Greece steadily ranking low within the EU regarding the time litigants need to receive answers,” Emvalomenos explains. Furthermore, he reports that, in major cities like Athens and Thessaloniki, the situation is “even worse, with delays often doubling or tripling.” 

To address these delays, Emvalomenos reports that, over a long period “various governments and ministers of justice have attempted to accelerate the judicial system. Numerous laws have been passed in recent years, but the results have been negligible. Deadlines and time limits are often not followed or applied; just last month, the current Minister of Justice made another effort to support acceleration, but such efforts have typically been more about words than action,” Emvalomenos shares. 

The most recent reform was introduced in May 2024. “It aims to support acceleration in a more structured manner. One significant introduction is the unification of first-instance courts dealing with civil justice, which has been a major problem area. This reform merges the single and three-member courts into a unified first-instance court system,” Emvalomenos explains. “This new system will come into force at the beginning of the next judicial year in September 2024, with Athens and Piraeus implementing it by 2026. However, it remains to be seen whether this change will truly speed up the process. Based on past experiences and the mentality of lawyers, I am doubtful about its positive impact,” Emvalomenos adds wearily. 

Continuing, Emvalomenos shares that, due to problems in litigation, many people are turning to alternatives like arbitration and mediation. “The 2023 law for international commercial arbitration aligns with modern arbitration practices, and in significant cases, parties often prefer arbitration. Mediation, which became mandatory for certain cases in 2019, is also on the rise. This change is based on the EU Mediation Directive and is helping to shift the culture among lawyers and litigants – many now understand that it’s better to try to compromise out of court, as it saves time and costs,” he says. 

Focusing on other significant sectors that have seen legislative developments come to pass, Emvalomenos mentions real estate, particularly having in mind “Greece’s Golden Visa program. This program, similar to those in Spain and other Mediterranean countries, has seen a significant increase in transactions. The minimum purchase price threshold has been raised due to high demand, which has driven up real estate prices, making it harder for Greek citizens to purchase property,” he explains. “Another key sector is renewable energy. Legislation is encouraging the growth of renewable energy sources, a necessary step in addressing climate change and finding more cost-effective and environmentally friendly solutions,” Emvalomenos shares. 

Finally, Emvalomenos mentions tourism as being a major sector of influence as well, “especially post-COVID-19. There has been a notable increase in tourism, which impacts various professions, from lawyers to hotel and ship owners. Lastly, shipping remains a stable and critical sector for Greece, continuing to produce significant economic activity and employment opportunities.”