The European Bank for Reconstruction and Development (EBRD) is supporting the ambitious sustainability and decarbonisation targets of Public Power Corporation S.A. (PPC), Greece’s largest power producer and electricity supplier, by investing €25.5 million in the company’s follow-up €500 million sustainability-linked bond issue.
With a total issuance volume of €500 million, the issue will help improve PPC’s access to finance by diversifying its financing sources to a new environmental, social and governance (ESG)-focused investor base.
In March 2021, the EBRD participated to the tune of €50 million in PPC’s €650 million sustainability-linked bond issue. PPC used the proceeds of the issue to refinance its existing debt.
This was the first sustainability-linked bond in the regions where the EBRD invests.
The follow-up bond will include a more ambitious sustainability performance target than the March issue, with PPC committing to reduce CO2 emissions by 57 per cent by the end of 2023. The reduction in annual CO2 emissions from 23.15 million tonnes in 2019 to 10 million tonnes in 2023 is the most ambitious corporate decarbonisation target the EBRD has ever supported in the regions where it invests.
This target is expected to be met primarily by decommissioning all lignite plants by 2023 and replacing them with renewable energy capacity in a significantly accelerated programme that will add 1.3 GW of mainly solar and wind power to PPC’s portfolio, for a total of 1.5 GW (including an existing 0.2 GW).
As the largest electricity generator and supplier in Greece, PPC plays a critical role in supporting Greece’s energy needs and its transition to a lower-carbon economy. Moreover, PPC is central to the country’s efforts cut its greenhouse gas emissions by at least 56 per cent from 2005 levels by 2030. It is also the owner of Greece’s electricity distribution network and sole provider of electricity to those Greek islands 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 (51.1 per cent), through the participation of the Hellenic Republic Asset Development Fund and the Hellenic Corporation of Assets and Participations.
The bond will be aligned with the International Capital Market Association’s (ICMA) Sustainability-Linked Bond Principles (SLBP), published in June 2020, which promote transparency, disclosure and integrity in the development of green and sustainability-linked bond markets.
In 2020, the EBRD provided a €160 million senior unsecured loan to PPC to help address the impact of the Covid-19 pandemic. The facility has been supporting PPC’s working-capital needs at a time of customer payment volatility and has strengthened the resilience of the electricity sector.
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 €4.7 billion in close to 80 projects in Greece’s corporate, financial, energy and infrastructure sectors.