Overview of RES and Infrastructure sectors in Greece
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Overview of RES and Infrastructure sectors in Greece Reliance Restricted January 2019
January 2019
1
Macroeconomic Overview
Overview of RES and Infrastructure sectors in Greece: | Page 2 of 13
January 2019
1 Macroeconomic Overview
Key indicators suggest that the Greek economy is on the verge of recovery
Current account deficit Nominal GDP Growth & Inflation
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 4% 4%
3.1%
0 0%
3%
-0.2% -2% 2%
-10 -1.6% -1.1% -0.8% -0.8% 3%
-2.0% -4% 2.0%
2% 0%
-20 -3.8%
-6% 2% 1.1%
1.0%
yoy % change
-30 -8% 1% -1.1% -2%
-1.3% -1.2%
-10% 1% 0% -4%
-40
-10.0% -12% 0%
-50 -11.5% -11.4% -1% -6%
-12.3% -14% -5.5%
-1%
-60 -16% -0.9% -8%
-15.2% -15.1% -2% -7.6% -1.1%
-8.4 -1.4%
Current account balance Current account balance (Percent of GDP) -2% -10%
2011 2012 2013 2014 2015 2016 2017
Government Debt Inflation Nominal GDP Growth
370 190%
183%
360 181% 180% 182% 185% ► The current account deficit of c.15% in 2008 was reduced significantly mainly
178% 179%
350 180% due to lower consumer spending as a result of the austerity program.
340 175% ► The austerity program is evident from the significant contraction of the
330
170% economy, expressed both as a decline of GDP and through deflationary
374
€ bn.
320
160% 165% pressures.
310
300 160%
321 322 323 ► The government debt (expressed as a % of GDP) remains at high levels,
315 320 155%
290 305 however has stabilized in the last 4 years.
280 150%
270 145% ► All indicators suggest Greece is at a turning point, improving its
2011 2012 2013 2014 2015 2016 2017 macroeconomic indicators (positive government balance, GDP growth, etc.),
despite any hiccups in the short-term, such as elections in 2019.
General government gross debt General government gross debt, % of GDP
Source: International Monetary Fund, World Economic Outlook Database, October 2018
Overview of RES and Infrastructure sectors in Greece: | Page 3 of 13
January 2019
1 Macroeconomic Overview
FDI vs Unemployment rate Economic Sentiment vs. Real GDP growth
Source: BoG, International Monetary Fund, World Economic Outlook Database, October 2018 Source: Eurostat, International Monetary Fund, World Economic Outlook Database, October 2018
40,000 Peak 30% 115 8%
35,378 27.5%
35,000 110 6%
30,141 25%
29,119 28,130
30,000 27,140 105 4%
24,788 20%
25,000 22,486
23,884 100 2%
22,119
19,605 19,712 18,951 18,743 95 0%
€ bn.
index
20,000 17,286 17,750 15%
yoy
16,287 90 -2%
15,000
10% 85 -4%
10,000 80 -6%
5%
5,000 75 -8%
0 0% 70 -10%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Foreign direct investment in Greece Unemployment rate Economic Sentiment Indicator (index) Real GDP Growth (yoy% change)
Economic Sentiment Indicator ► Greece’s economic sentiment index, after maintaining a net pessimistic
position throughout most of 2008-16, returned to a net optimistic position in
Source: Eurostat
109 108 >100 optimistic December 2017.
January 2019
1 Macroeconomic Overview
GDP Growth General Government Debt
4.0% 3.4% 3.7% 3.3% Source: International Monetary Fund, World Economic Outlook Database, October 2018
260 3.0% 2.9% 2.9% 4%
2.0% 350 200%
240 -28.0% 188%
2% 190%
345 177%
23.3%
220 169% 180%
-1.1% -1.3% -1.2% 0% 340
-1.8% 163% 170%
200 155%
-2% 335 151% 160%
€ bn.
180
€ bn.
-4.8% 330 150%
-5.5% -4% 344
160 325 140%
-6% 335 130%
140 -7.6% 320 332
-8.4% 330 324 120%
-8% 324
120 315 110%
100 -10% 310 100%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Gross domestic product, current prices Nominal GDP growth rate, yoy % change General government gross debt General government gross debt, % of GDP
Source: International Monetary Fund, World Economic Outlook Database, October 2018
► The country’s recovery is projected to strengthen in the near-term, with real
Inflation GDP growth expected to reach 2,4% in 2019. In the medium term, real GDP is
Source: International Monetary Fund, World Economic Outlook Database, October 2018
expected to grow by 1.5% on average.
2.0% ► Until 2018, Greek GDP is expected to recoup c. 13% of the loss inflicted during
1.8% the crisis. Nominal GDP is expected to reach €214.8 bn in 2023, recouping a
1.6% significant portion of the loss inflicted during the crisis (60%).
1.4% ► Taking into account IMF projections until 2023 and a stable growth in nominal
1.2% GDP after 2023 equivalent to the 2023 levels, GDP is expected to reach 2008
1.0% Oct 2018: levels in 2027.
1.1%
0.8% ► Inflation in the medium term is expected to be in the region of 1.8%, which is
0.6% close to the 2% target inflation for the Eurozone.
0.4%
► Unemployment is expected to ease in the medium term, with unemployment
0.2% rate expected to decline from 19.8% in 2018 to 14.1% in 2023.
0.0%
2018 2019 2020 2021 2022 2023 ► General Government debt as % of GDP is expected to be on a downward trend
until 2023, reaching 151.1%.
Overview of RES and Infrastructure sectors in Greece: | Page 5 of 13
January 2019
2
The Greek RES sector
Overview of RES and Infrastructure sectors in Greece: | Page 6 of 13
January 2019
2 The Greek RES sector
An attractive sector with significant room for growth and excellent resources
► In terms of RES, Greece offers an excellent wind and solar potential. RES installed capacity (MW)
► Ambitious and regularly reaffirmed targets for RES development: the Greek
Source: LAGIE, Aug 2018 Aug-18 2020 target 7500
electricity TSO forecasts c. 4.7GW of new RES until 2027.
► The RES sector recently switched from a FiT scheme to a FiP scheme via
auctions that fosters rationalization of tariffs and market stability. Includes 4650
► 2.6GW of new wind and solar tenders to come in the next 3 years (have already small Hydro
of 234MW 3405
started in July 2018). installed 2770
capacity with 2250 2200
► RES transactions have resumed in the recent years, following a period of
a 2020 target
subdued activity. of 350MW
250 350
► Financing for RES projects mainly provided by Greek systemic banks and 67
multilaterals; foreign commercial banks still absent from market.
Hydro PV* CSP Wind Biomass / Biogas
* EU targets for solar do not take into account roof solar, thus roof solar capacity is not included in
Natural resources PV category
Large surface Solar PVs with
Installed capacity Jun-18: 2017 continued the trend of 2016, which proved to be
areas with irradiation second best year for wind power installations after 2011, with deployment of new
wind speed between 3.8 – 121MW capacity unitl Sep 2017.
between 4m/s - 5.5KWh/m2/da
10m/s y ► In 2018, the Greek wind power sector comprised of ten major market players
operating wind parks of c. 2,7GW of installed capacity and a considerable
pipeline of projects.
► Greece’s top five wind energy groups are: Τerna Εnergy (536MW), Eltech
Anemos (286 MW), Iberdrola Rokas (251MW), EDF EN (238MW) and Enel
Green Power (201MW).
► The solar power sector covered nearly 7% of the country's electricity needs with
a total installed capacity of 2,229MW (2,094MW interconnected system,
135.89MW NIIs), bringing Greece to one of the first places worldwide in terms
Source: Global Energy Network Institute
of the contribution of PV to total electricity demand.
Excellent wind and solar potential
Overview of RES and Infrastructure sectors in Greece: | Page 7 of 13January 2019
2 The Greek RES sector
Recent significant developments in the Greek RES sector
Recent policy developments Recent market developments
► Law 4414/2016 introduced Feed-in Premiums (FIPs), which in most cases, replaced the Financing
Feed-in-Tariff (FiT).
► All wind farms (with the exception of wind farms with capacityJanuary 2019
3
Infrastructure investment
opportunities in Greece
Overview of RES and Infrastructure sectors in Greece: | Page 9 of 13January 2019
3 Infrastructure investment opportunities in Greece
1 The project consists of the two sections which will run along the northern cost of the island, linking
Investment
the cities of Chania, Rethymno, Heraklion and Agios Nikolaos.
The two projects are being procured as: PPP portion: €1.1bn.
a 30-year availability-based design, construct, finance, operate and maintain PPP contract
Concession portion:
Northern Road Axis of for the 26km Hersonissos to Neapolis section, which also includes an option for the
€290mn.
Crete maintenance and operation of the adjacent 14km Neapolis to Agios Nikolaos section
whose construction is expected to be delivered under a public procurement contract.
a 25-year concession contract for the 140km Chania–Heraklion section.
EoIs have been received from international and local contractors and infra funds, inc. Shikun & Binui
from Israel.
2 Key figures (2017)
The Greek State’s privatization fund, Hellenic Republic Asset Development Fund (HRADF), is
Pax: €21.74mn.
contemplating the sale of its 30% stake in Athens International Airport (AIA).
Process is expected to be initiated in Q1 2019. Revenues: €454.9mn.
Athens International
The HRADF accepted in September 2018 a €1.115bn. offer, including VAT, from AIA in exchange for EBITDA: €284.5mn.
Airport
a 20-year extension to the concession agreement until 2046.
AIA's other shareholders include PSP Investments (40% - Canada), Greek state (25%) and
Copelouzos Group (5% - Greece).
3 Investment
30 year license for the design, construction, operation and financing of an integrated resort casino,
>€500mn.
consisting of a casino development and accompanied by hospitality, retail, leisure, and MICE
facilities.
Hellinikon Integrated
A greenfield project forming part of the Hellinikon project, one of the largest RE developments to be
Resort Casino (IRC)
constructed in Greece.
Interest has been expressed by 5 international strategic investors and 2 funds
RfP expected to be launched in January 2019.
Overview of RES and Infrastructure sectors in Greece: | Page 10 of 13January 2019
3 Infrastructure investment opportunities in Greece
4
HRADF’s portfolio of ports includes the ports of Volos, Rafina, Igoumenitsa, Patras, Alexandroupolis, Heraklion, Elefsina, Lavrion, Corfu and
Kavala.
10 ports
HRADF holds 100% of the shares in the aforementioned port companies, which have the right to operate the respective ports until 2042.
Privatization of the above ports is expected to start in 2019.
5 Investment
The municipality of Chania in Crete has launched the tender for a school PPP project, comprising the
Chania Schools PPP project:
design, build, finance, maintenance and operation of eight schools, as well as the redevelopment and
€41mn.
upgrade of the Peace and Friendship park in Chania, for 27 years.
Schools PPP project
Interested parties are invited to submit expressions of interest by 20 February 2019. Rhodes Schools PPP
(Chania and Rhodes)
The Rhodes schools PPP project entails the design, build, finance, maintenance and operation of 13 project: €42mn.
schools in Rhodes island, for 27 years.
The pre-qualification tender is expected in early 2019.
6 Investment
€44mn.
Integrated Waste
Management System The project entails the design, build, financing, maintenance and operation of the Integrated Waste
Management System of Rhodes Island through a PPP scheme with a duration of 27 years.
of Rhodes Island
Currently, the awarding authority seeks to appoint advisors.
through PPP
Overview of RES and Infrastructure sectors in Greece: | Page 11 of 13January 2019
4
Appendix
Overview of RES and Infrastructure sectors in Greece: | Page 12 of 13January 2019
4 Appendix
► In preparing this presentation (“Presentation”), we have used information from public sources or proprietary databases. No responsibility is assumed for
information furnished by others, and such information is believed to be reliable. EY has relied on such information pursuant to a limited survey and does
not in any case represent or warrant that such data is adequate, accurate or complete.
► Our work does not intend to provide assurance on the achievability of the projections or on the assumptions underlying such statements. There are
usually differences between projected and actual results because events and circumstances frequently do not occur as expected and those differences, if
any, may be material.
► This Presentation should be viewed as a whole document.
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