Funding Projects in Greece: Challenges and Actions

1. 7th International Scientific Conferenceon Energy and Climate Change FUNDING PROJECTS IN GREECE NATIONAL BANK OF GREECE S.A. Konstantinos Venetsanos Project Finance Division Athens, 10October 2014

2. The risk profile of projects has changed due to: Decrease in project revenues due to the economic crisis, Unable to form reliable forecasts, Debt crisis has serious impact on government obligations (expropriations, VAT refunds, payments of compensation, etc.).

3. New terms of funding • Banks’ requirements have become more conservative, • Increased investor participation (from 20% to 40% -50% of project budget), • Shorter loan tenors (Mini Perm), • Cash Sweep mechanisms, • Increased guarantees and securities (government and / or corporate), • Increased margins as a result of the increase of funding costs for the Banks.

4. Critical factors for the banking sector • Upgrade creditworthiness Greek banks, • Positive GDP growth rates, • Reduced growth rate of non-performing loans.

5. Infrastructure projects in Greece Significant to the economic activity are Infrastructure Projects • New technology Thermal Power Plants reducing CO2 emission • New motorways that reduce travel time and distance • Successful projects’ restart in December 2013, • Accelerated payment procedures (expropriation, VAT refunds, payments of compensation, etc..), • Multiplier effects on the economy, particularly at regional level, • Increase confidence of foreign investors and banks to participate in new projects.

6. Waste management projects • NBG is involved in the financing of almost all waste managed projects in Greece,

7. Financing renewable energy projects NBG Group data as at 31/12/2013

8. Public Private Partnership (PPP) Projects • NBG is actively financing : • Mainly in the field of waste management - schools - telematics • During the second quarter of 2014, contracts were signed for two PPP schools (22 schools in total) in Attica (participation and program JESSICA), • Telematics Project (signed 30/6/2014). • Increased participation of EIB after successful recapitalization of Greek Banks • These projects contribute to environmental sustainability

9. CHALLENGES ACTIONS • Encouraging competition between the private entities, • participation of EIB, • Increase in Equity requirements, • Club Deals (syndicated loans), • Escape clauses, • Renegotiation clauses. • Increase in cost of risk for private investors, • Increase in financial cost of the project due to pricing of credit risk by banks, • Available funds need to be directed towards creditworthy projects, • Requirements for binding banking letters of support. PPPs challenges The relatively small size of the Greek PPPs is an advantage in the current situation

10. European programme JESSICA • Joint European Support relating to Sustainable Investment in Urban Areas, • Initiative of the European Commission (DG Regional Policy) in cooperation with the EIB in order to promote sustainable investment in urban areas, • The financing of urban development is through the "conversion of subsidies" to a funding mechanism “refundable grants”, • The initiative provides for the establishment of Urban Development Funds (UDF), which will be responsible for implementing the program through the JESSICA Holding Fund, • To Holding Fund is a fund of funds, managed by the EIB, which is established for the investment of resources in Urban Development Funds,

11. European programme JESSICA • Enhanced mobility of capital for urban development and PPP focusing on sustainability and environmental friendly solutions, • Incorporating the experience of international financial institutions such as the EIB, • NBG participates in the programme acting as Manager of Urban Development (UDF) for the regions of Attica, Western Greece, Ionian Islands, as well as projects of the Operational Programme "Environment and Sustainable Development" (EPPERAA),

12. JESSICA Holding Fund (HOLDING FUND) MANAGEMENT (EIB ) OPERATIONAL CONTRACTS (OPERATIONAL AGREEMENT) COMPETITION, SELECTION AND INVESTING IN UDF URBAN DEVELOPMENT FUND (UDF) INVESTMENT AGREEMENT (INVESTMENT AGREEMENT) LOANS, EQUITY FUNDS FOR PROJECTS REPAYMENT OF RESOURCES TO IMPLEMENT PROJECTS UDF URBAN DEVELOPMENT PROJECTS JESSICA ‘S STRUCTURE IMPLEMENTATION

13. European programme JESSICA • Urban infrastructure (parking facilities and green areas), • Urban rejuvenation (refurbishment of buildings), • Public Networks (transport, water, sanitation, energy), • Health / education (hospitals, rehabilitation centers, etc.). Indicativeareas of interest :

14. An example of project within the scope of Jessica:Municipality of Alexandroupolis’ Energy Saving Project Regarding the contribution of Jessica for the implementation of energy saving project, Municipality of Alexandroupolis is willing to realise the following project in the context of Jessica initiative. • Project budget of € 2,33 million • Installing photovoltaic cells in 16 schools for producing electricity from RES, • Replacing 2,028 lighting street lighting system throughout the city of Alexandroupolis type LED luminaires, • 7 Supply of electric vehicles for use by the municipal services, • Phase 1 for eligibility has been completed.

15. Thank you ! NATIONAL BANK OF GREECE SA Project Finance Division 128-132 Athinon Avenue, GR104 42 Tel. : +30210 51 81 384 Fax: +30210 51 81 400 Email: kvenetsan@nbg.gr