EBRD invests in PPC’s capital increase in Greece

By Olga Aristeidou of EBRD

© PPC

• EBRD invests €75 million in PPC’s €1.35 billion capital increase
• PPC to accelerate investments in renewable energy in Greece and south-eastern Europe
• Power utility to focus on digitalisation and modernisation

The European Bank for Reconstruction and Development (EBRD) is supporting the transformation of the Public Power Corporation (PPC), Greece’s largest power producer and electricity supplier, with an investment of €75 million in the company’s €1.35 billion share-capital increase.

The EBRD’s proceeds will be used exclusively for renewable energy

assets and will explicitly exclude any fossil fuel assets.

The new capital will enable PPC to accelerate its investments in renewable energy, both in Greece and in south-eastern Europe, and to become a financially and environmentally sustainable, modern and digital utility. As a result of the transaction, PPC also aims to benefit from a more diversified investor base that has a greater focus on environmental, social and governance (ESG) issues.

ESG disclosure is an area of collaboration between PPC and the EBRD that has resulted in the development of an information disclosure plan in accordance with the guidelines of the Task Force on Climate-related Financial Disclosures (TCFD).

PPC has a total capex target of €6 billion for 2022-24, of which €3.2 billion is expected to be invested in renewable energy and €1.0 billion in electricity distribution. The firm’s rapid programme for phasing out lignite will be complemented by a massive increase in renewable energy capacity, which is expected to grow from 3.4 GW in 2021 to 8.4 GW in 2026.

As the largest electricity generator and supplier in Greece, PPC plays a critical role in supporting the country’s energy supply and its transition to a lower-carbon economy. The company is central to Greece’s efforts to reduce its greenhouse gas emissions by at least 56 per cent from 2005 levels by 2030. It is also the owner of the country’s electricity distribution network and sole provider of electricity to Greek islands that are not connected to the national grid.

The company has been listed on the Athens Stock Exchange since 2001 and its main shareholder is the Greek state, through the participation of the Hellenic Republic Asset Development Fund and the Hellenic Corporation of Assets and Participations. As a result of the capital increase, the state’s shareholding will fall from 51 per cent to a minority position of around 34 per cent.

Jürgen Rigterink, EBRD First Vice President, said: “We are delighted to become a shareholder in PPC and endorse both a transformation strategy that seeks to mobilise more private capital in PPC and an impressive plan to scale up renewable investments in Greece and in south-eastern Europe.” 

Georgios Stassis, CEO and Chairman of the Board of Directors at PPC, commented: “We are very glad to expand our cooperation with the EBRD through its participation in the share capital of PPC, showcasing once more time the confidence in our transformation plan to become a financially and environmentally sustainable digital utility.”

Yiannis Tsakiris, Deputy Minister for Development and Investments for Greece, said: “I am very happy that the EBRD is supporting PPC by participating in the share-capital increase, a hugely successful turnaround story, on the company’s path towards a greener and more sustainable business model. The EBRD has once more proved its commitment to the Greek economy and private sector.”

In March and July 2021 the EBRD participated, with a total amount of €75.5 million, in PPC’s sustainability-linked bond issues. PPC used the proceeds to refinance existing debt. These were the first sustainability-linked bonds in the EBRD regions with performance targets for the reduction of CO₂ emissions.

The EBRD started to invest in Greece on a temporary basis in 2015 to support the country’s economic recovery. To date, the Bank has invested more than €5 billion in over 80 projects in Greece’s corporate, financial, energy and infrastructure sectors.