Greece's economy grew steadily in 2024, with a GDP growth rate expected at around 2.2% by the end of the year; tourism and consumption play an important role in this progress. Investment continues to be a major driver for Greece's economic recovery and financial stability, especially fuelled by European Recovery funds, which have provided substantial liquidity for infrastructure, green and digital projects.

As of 2024, Greece's NPL (non-performing loan) ratio equals 3.3%.

Securitisations and loan sales supported by government-backed initiatives like the "Heraklis Programme" have been instrumental in reducing the number of NPLs on bank balance sheets.

In addition, the ECB (The European Central Bank) has maintained a tight monetary policy to combat inflation, which has led to rising interest rates. In early 2024, the average interest rate on loans to non-financial corporations has risen to 6.24%, with rates on consumer and mortgage loans also seeing significant increases. In contrast to the negative mortgage lending growth, Greece has seen a 10% increase in corporate lending.

Global conflicts, particularly the Russia-Ukraine war and rising Middle East tensions have indirectly impacted the Greek loan market in 2024. The consequences are primarily increased uncertainty and rising interest rates. These conflicts have led to volatility in energy markets, driving inflation and prompting the ECB to maintain higher interest rates, consequently raising the borrowing costs.

The high-yield bond market has played a critical role in Greece’s financial market trends, especially as the country has recovered from its debt crisis and gained investment-grade status.

The high-yield market has offered legal entities the benefit of lower yields due to Greece's recent credit upgrades. This has led to greater diversification in financing strategies, with companies issuing bonds to secure long-term financing and investors becoming more willing to take on corporate debt at higher returns.

Additionally, the involvement of international investors in Greece’s high-yield market has increased, enhancing liquidity and encouraging more sophisticated financial structures. This trend aligns with broader European high-yield market activity, which is becoming more attractive due to the demand for yield amidst global economic uncertainty.

The Greek loan market operates as a regulated environment where lending activities are primarily reserved for credit institutions and, under specific conditions, credit companies and loan management companies. Special treatment has been formed by the legal practice for bond loans, which are only issued by Sociétés Anonymes.

Notably, a major regulatory change in 2023 broadened the scope for credit companies, allowing them to serve not only individual borrowers but also businesses. This expansion introduces new financing options for legal entities, including refinancing and restructuring solutions, enabling credit companies to meet the varied financial needs of corporate clients. The market's demand for this type of financing, however, remains to be observed.

HoldCos are gaining momentum in the Greek credit market. The inclusion of a holding company in the corporate structure may allow tax optimisation and efficiency with respect to dividends and interest payments.

Preferred equity is gaining ground, given the very active involvement of private equity and venture capital schemes in the Greek market. These investors have developed a variety of preferred equity structures tailored to meet the specific needs of different industries, enhancing flexibility and appeal for Greek businesses seeking capital.

The Greek systemic banks participating in syndicate deals invariably integrate compliance requirements relating to ESG standards and indemnities for breaches.

ESG lending is especially prevalent in the energy industry. Greek banks and foreign investors have actively channelled funds through green bonds towards renewable energy projects, aligning with the European Union’s Green Deal and Fit-for-55 goals.

Both banks and non-banks (loan management companies and credit companies) in Greece are required to be licensed by the Bank of Greece (BoG) in order to provide financing to a company. Banks (organised either as a company (société anonyme), a credit co-operative, a European company (SE) or a European Cooperative Society) must meet specific requirements, which in brief are the following:

• EUR18 million in fully paid-up initial capital;
• fit and proper assessment for shareholders, directors, and management;
• a comprehensive business plan covering the first three years;
• compliance with internal control standards; and
• participation in the Deposit Guarantee Scheme.

Non-bank financial institutions must also be licensed by the BoG and comply with anti-money laundering and financial governance rules.

The institution must submit an application to the Bank of Greece, which would include the information requested for banks (a comprehensive business plan outlining the activities, risk management, and governance structure, information on key shareholders and managers, including a "fit and proper" assessment) plus proof of minimum initial capital.

EU/EEA licensed institutions can operate in Greece via passporting rules, while non-EU banks require a separate license.

Please refer to section 2.1 Providing Financing to a Company.

The receiving of security or guarantees by foreign lenders is not restricted or impeded in any way.

There are no restrictions or controls regarding foreign currency exchange.

In principle, there are no restrictions on the utilisation purpose of loans or debt securities. However, credit institutions are bound by Law 4557/2018 on the prevention of the use of the financial system for money laundering or terrorist financing, implementing the Directive (EU) 2015/849 (the "4th Anti-money Laundering Directive"), Directive (EU) 2018/843 (the 5th Anti-money Laundering Directive") and Directive (EU) 2018/1673 on combatting money laundering by criminal law. Therefore, when credit institutions lend monies to borrowers, they routinely incorporate appropriate language in the debt agreements in order to eliminate or mitigate the risk of AML breaches. In the finance documentation, information undertakings and conditions precedent on the delivery of information by the borrower can be found, which can pertain to the nature and scope of the borrower's anticipated use of the debt proceeds. The insertion of such language will align with the respective credit institution's internal "know-your-customer" procedure (KYC), which has been developed and implemented to monitor suspicious operations. 

The institutions of agency and trust established in the common law do not exist in the Greek jurisdiction. A concept resembling that of a trustee, which is found in bond loans governed by Greek law, is that of a bondholder agent. The bondholder agent acts as a representative of the bondholders and exercises the rights and powers arising out of the bonds on the bondholders' behalf. It holds the benefit of the security interests established in connection with the bond loan for the bondholders in its name and its capacity as a bondholder agent.

If another law governs the bond loan, the person entitled to hold personal and in rem security interests in its name and on behalf of the bondholders is recognised by Greek law as having the powers vested in the bondholder agent. As a matter of Greek law, an additional requirement which has to be met in this case is the insertion of parallel debt language in the finance documentation so that the person can validly hold the benefit of the security interests in their own name.

The rights under a loan agreement may be contractually assigned by way of sale. A Bank may also sell a loan portfolio to a credit-acquiring company. Another option is to transfer the loans as part of a securitisation transaction, which has been substantially employed primarily by Greek banks.

A security interest is an ancillary right to that of the principal obligation it secures, and, as a result, it is transferred by operation of law together with the transfer of the principal claim it secures.

In Greece, debt buybacks by borrowers or sponsors are generally permitted under specific conditions and are used as a tool for restructuring and reducing debt. Debt buyback is found on bond loans and would entail the cancellation of the respective bonds when the borrower repays the debt. This practice is common in distressed debt scenarios or when companies have financially strong sponsors who may infuse additional capital into the business.

In Greece, "certain funds" provisions are critical and required in public acquisition finance transactions, particularly during takeovers or mergers. Such provisions have not yet become a standard part of acquisition financing in private markets, but other mechanisms, such as commitment letters, ensure deal certainty and protect sellers and buyers by reducing the risk of funding withdrawal.

Short-form and long-form agreements are used for documentation depending on the transaction size and complexity.       

Law 5072/2023, which transposed Directive (EU) 2021/2167 on credit managers and credit purchasers and reintroduced the Heraklis Programme, among other provisions, brought several charges in the legal documentation used. Apart from the regulatory work regarding the licensing of credit servicers under this law, changes were also required in the legal documentation. For instance, additional language was inserted in the service level agreement in relation to the servicer's collection of funds.

In addition, under Law 5095/2024, the process for registering a prenotation of mortgage can now be performed by a lawyer duly authorised to do so without the need to involve court. The borrower's legal advisor submits the necessary application and supporting documents to the lawyer vested with the authority to issue the respective act. The submission may also be completed digitally, simplifying it and reducing the administrative burden. The lawyer's act serves as the legal basis for both the registration and the removal of the prenotation of the mortgage, which previously required a court order. Consequently, this change was also reflected in the Greek civil code, which currently provides payment orders, arbitral awards, and other acts or orders recognised by law as titles for the registration of prenotations of mortgages.

Moreover, Law 5123/2024, which will be brought into effect by 31 December 2024 (or earlier should the Hellenic Cadastre issue such a decision), modernised the legislative framework for taking security interests over movable assets and tracing their status, in line with EU and international best practices to facilitate the extension of credit. The changes incurred by Law 5123/2024 are twofold:

• firstly, they pertain to certain technical provisions regarding the creation of pledges; and
• secondly, they introduce the Single Central Electronic Registry of Pledges.

For more details on this development, please refer to our responses to the 2024 Trends & Developments.

In Greece, no direct provision imposes a specific cap on the amount of interest that can be charged in loan or credit agreements. An exception would be the maximum default interest rate charged by credit institutions, which cannot exceed 2.5% per annum of the contractual interest.

For credit granted by non-bank institutions, the contractual and default interest rate should align with the reference rate determined by the Bank of Greece.

A noteworthy point is that Law 3259/2004 establishes a limitation on the overall outstanding debt in such agreements. Specifically, the total outstanding debt arising from any form of loan or credit agreement with a credit institution may not exceed three times the amount of the capital originally drawn down for each loan or credit agreement. This threshold applies to the aggregate sum of the capital drawn down across all agreements in cases involving multiple loans or credits. For current revolving accounts, the limit is set at three times the debt amount as it stood at the time of the last disbursement.

In Greece, certain financial contracts are subject to mandatory disclosure requirements, particularly for entities involved in public markets or under regulatory supervision.

Listed companies must comply with capital market disclosure requirements, which include disclosure obligations for financial reporting, including annual, semi-annual, and quarterly reports. Additionally, significant shareholding changes must be disclosed to the Hellenic Capital Market Commission (HCMC).

Credit institutions must meet additional requirements, which demand disclosure of holdings above certain levels, particularly if these holdings can influence management decisions.

Payments of interest under bond loans are subject to withholding tax, which amounts to 15%. There is no withholding tax for other types of bank credit arrangements.

Stamp duties, corporate income tax, real estate transfer tax and VAT, besides withholding tax, may be relevant to lenders making loans or taking security from entities incorporated in Greece. Stamp duty may apply to loan agreements between companies that are not credit institutions. However, the levy of Law 128/1975 might be imposed on credit granted by banks. It is also worth mentioning the real estate transfer tax, which is triggered if the loan is secured by a mortgage. In this case, a mortgage registration duty of 0.775% of the secured amount and additional notary and registration fees would be applicable. In addition, loans might be subject to corporate income tax. Interest paid on loans is generally deductible for Greek entities, but restrictions such as thin capitalisation rules may limit interest deductibility if certain debt-equity ratios are exceeded. Last, despite the VAT exemption on loans, lenders should also be aware of the VAT that fees for ancillary services may attract.

Tax concerns can be mitigated by properly structuring the transaction. The parties may structure the financing in the form of a bond loan, which benefits from exemptions with respect to stamp duty (now Digital Transaction Duty) and the levy of Law 128/1975.

In certain cases, double taxation treaties (DTTs) are enforceable, or EU legislation could be applicable, which may reduce the withholding tax.

If a foreign lender is actively involved in managing or overseeing loans in Greece, this could constitute a permanent establishment trigger for the lender, exposing them to Greek corporate tax on their profits. Mitigation involves ensuring the proper structure of the transaction to minimise the risk that the foreign lender has a physical presence or significant business activities in Greece.

Please also refer to 4.2 Other Taxes, Duties, Charges or Tax Considerations.

Depending on the type of financing, certain assets will be typically required by the lenders to form the collateral package. Together with the form that the security typically takes, the most common assets encumbered for the benefit of the financiers are set out below.

• Ownership rights, such as shares, share units, participations and interests in legal entities: the security may take the form of financial collateral or a pledge (see Pledge below).
• Claims arising out of bank accounts, intragroup or other loans or credit agreements, insurance contracts, lease contracts, etc: the security may take the form of assignment of claims (see Assignment below) by way of pledge (for credit claims and claims on bank accounts, the security may also form financial collateral). If certain conditions are met, a floating charge may also be permissible.
• Movable assets: the security may take the form of a pledge. If certain conditions are met, a floating charge may also be permissible.
• Immovable assets: the security may take the form of a mortgage or prenotation of a mortgage (see Mortgage below).

The valid creation of a pledge in accordance with the Greek civil code would entail the delivery of the underlying asset to the lender.

In relation to the costs, each official service by a court bailiff would be in the region of EUR40.

Pledge

A pledge is perfected by the service of the agreement via a court bailiff to the respective legal person. A share pledge, the most common security over ownership rights, should be registered with the shareholders' book if the shares are paper-form, and the relevant certificates should be annotated. In the case of dematerialised shares, the pledge agreement should instead be serviced to the central securities depository and be registered with its system.

Assignment

The assignment agreement should be serviced via a court bailiff to the counterparty, which owes obligations according to the contract. In order to collateralise claims under bond loans for which bond certificates are issued, said certificates should be annotated, and the bondholder's registry should reflect the encumbrance on the bonds. A notification form in connection with the floating charge should be registered with the competent pledge registry, and the agreement should be sent to the pledgor.

Mortgage

A mortgage is perfected by the registration of the respective title, which confers the right to record a mortgage upon the lender with the competent land registry or cadastral office (as applicable). The said title is comprised of a notarial deed or a court decision. The perfection of a prenotation of a mortgage also includes the registration of the respective title, that being a court decision, a payment order or minutes of a mediation procedure with the land registry or cadastral office.

The establishment of the following security interests of (i) prenotation of mortgage, (ii) mortgage, (iii) notional pledge and (iv) floating charge are subject to a flat registration fee at the competent public registry, along with fees proportional to the secured amount (currently around 0.8%). However, the recent enactment of Law 5142/2024 stipulates that these flat and proportional fees will be redefined by virtue of a joint decision by the Ministers of Digital Governance and Economy, following input from the Hellenic Cadastre.

Specifically for bond loans, the fee for each registration of security interests with the relevant public registries is EUR100, while the fee of a notary is fixed at EUR2,500 per deed.

Subject to the above specific perfection steps required for each security, a written agreement is needed to create all security interests. If the actions are not followed, the validity of the relevant security interest may be questioned.

There is no universal or similar security interest in the Greek legislation over a company's present and future assets. According to Greek law, an individually defined movable asset or right may become the subject of a security interest. A floating charge that can be granted over a company's present and future assets, which are at least identifiable, is only available if the parties to the security are businesses. Future assets may be the subject of a security interest as long as they can be identified or identifiable.

Certain restrictions apply to companies in relation to the giving of downstream, upstream and cross-stream guarantees. In principle, related party transactions are void. Special approval of such transactions by the board of directors or, exceptionally, by the general assembly of the shareholders and the publication of the announcement of such approval is required to make the transaction valid. Irrespective of the body authorising the transaction, the board of directors proceeds with publishing the announcement of the approval with the general commercial registry.

An additional requirement is imposed on companies with listed shares. The board should obtain a fairness opinion issued by an independent auditor for transparency purposes before authorising the granting of the guarantee.

The company may validly give the guarantee immediately upon obtaining the written consent of all shareholders that they will abstain from convening the general meeting to resolve this respect or eventually ten days after the publication date of such approval in the registry.

For further information, please see 5.4 Restrictions on the Target.

Financial assistance restrictions are in place in Greece, prohibiting the target company from making prepayments, grant loans or guarantees for the acquisition of its own shares.

Financial assistance may be permitted if the following conditions are met:

• the financial assistance is made on an arm’s length basis;
• a report is prepared by the board of directors stating how the said transaction serves the corporate interest of the company, its terms and any liquidity or solvency risk it might entail; the report should be communicated to the general assembly of the shareholders and published in the general commercial registry;
• shareholders' approval during the general meeting is obtained with enhanced quorum and majority;
• the company’s net equity should meet or exceed the paid-up share capital along with any non-distributable reserves at all times.

The target company should record in the liabilities section of its balance sheet a non-distributable reserve in the amount equal to that of the financial assistance to be provided.

Stamp duty might be applicable for granting the guarantees or security, depending on whether the secured credit triggers stamp duty. Giving a guarantee or security in connection with a non-bank loan agreement might give rise to payment of a stamp duty.

A security interest is an ancillary or accessory right. That means that security rights are dependent on the underlying obligation they secure. Therefore, the security right is automatically extinguished if the debt is discharged.

There are some formalities which should be adhered to in order to publicise the release of the security. The process is relatively straightforward, but it may vary slightly depending on the type of asset and the specific security involved.

Where the security interest has been registered with a competent authority such as a land registry, cadastral office or pledge registry, deregistration should take place, or the said registry should be updated accordingly to reflect the change of the beneficiary of the security interest.

The release of any type of security may also include the execution of a written agreement between the pledgor and the pledgee, confirming the repayment or discharge by other means of the secured obligation.

The Greek code of civil procedure has detailed rules governing the priority of competing security interests. These rules come into play if the auction proceeds are insufficient to cover the claims of all creditors. According to the said legislation, claims may come with privileges of the following types, which in turn determine the class of the respective creditors:

• claims established by operation of law come with a general privilege;
• claims created due to a pledge or mortgage come with a special privilege; and
• unsecured claims come without privilege.

If claims with different privileges compete with each other, then claims with a special privilege would have priority and be satisfied up to 65%, followed by claims with a general privilege, which would be satisfied up to 25% of the auction proceeds. Unsecured creditors would participate proportionally to the remaining 10% of the distribution of proceeds. If there are claims with special privilege and without privilege, the former shall be satisfied up to 90% of the amount of the auction proceeds, while the latter up to 10% of the said amount, which shall be distributed to the unsecured creditors proportionally.

The priority of claims among a group of lenders or between two separate groups of lenders can be contractually varied by entering into a subordination or inter-creditor agreement. This is a common practice in syndicated loans or mezzanine finance structures involving different debt tranches.

Contractual subordination provisions should remain effective in the insolvency of a borrower incorporated in Greece so long as they do not alter the statutory ranking of creditors and do not conflict with mandatory provisions of the law. As such, claims with a general privilege (eg, unpaid social security contributions) may override any contractual subordination. Furthermore, the insolvency administrator may challenge certain transactions if deemed detrimental to creditors.

In the context of a securitisation transaction, a statutory pledge over the business receivables is established for the benefit of the bondholders over the receivables and the collections of the receivables.

The standard procedure for enforcing collateral commences with the secured creditor obtaining an enforceable title, eg, a final, non-appealable court decision. Once the enforcement title is issued, the secured creditor procures its delivery to the debtor by a court bailiff, along with a payment order instructing the debtor to settle the outstanding secured debt. After three days, the creditor can move forward with confiscating the collateral and arranging a public auction to sell it.

For security interests established under the Legislative Decree 17.7/13.8.1923, for the benefit of credit institutions, enforcement is more streamlined; No enforceable title is required, while secured creditors may publish a notice for the public auction of the pledged assets immediately, bypassing the three-day period that applies in standard enforcement procedure.

The most expedited and straightforward enforcement process is set out for the realisation of security in the form of financial collateral. Aside from not requiring an enforcement title or the three-day waiting period, the financial collateral can be sold directly by the creditor, or the creditor may acquire ownership of the collateral and set off its value against the financial obligations owed by the debtor.

Greek courts should uphold the choice of foreign law as long as the chosen law does not violate Greek public policy. In cases where public policy or mandatory rules apply, such as in relation to insolvency proceedings, Greek law may override the foreign law chosen by the parties.

The submission to a foreign jurisdiction will likely be upheld in Greece unless other reasons exist, such as jurisdiction rules on exclusive competence. For instance, in proceedings that concern rights in rem in immovable property, a Greek court may decline to respect the choice of a foreign jurisdiction.

Waivers of immunity can be upheld under Greek law, provided the entity waiving immunity has the capacity to do so. State-owned entities or sovereign borrowers may be subject to different rules depending on whether Greek or EU laws restrict their ability to waive immunity in a contract. Greek courts would review such waivers carefully to ensure they do not violate any sovereign or any Greek public law principles.

Judgments issued in other EU Member States (other than those issued in Denmark) are enforceable in Greece without retrial of the merits of the case. There are certain grounds for the refusal of the recognition of such EU judgment, such as if the judgment is irreconcilable to an earlier judgment given in another Member State.

A judgment by a foreign court can be recognised and enforced in Greece first and foremost if it is stipulated in EU Regulations or International Conventions. Secondly, a foreign judgment against a company may be enforceable in Greece if certain conditions are met; the judgment should be final, not subject to appeal in the foreign jurisdiction and should not violate Greek public policy, and the foreign court had proper jurisdiction in accordance with the Greek law. The Greek court will not retry the merits of the case; it will merely examine if the requirements for the recognition of the foreign decision are met.

Foreign arbitral awards may also be declared enforceable by Greek courts if they fulfil the below conditions:

• the agreement upon which the award was based is valid under the foreign law governing it;
• the subject matter could be resolved by arbitration as a matter of Greek law;
• the award is not subject to appeal, and no proceeding challenging its validity pending;
• the losing party was not denied the right to defend itself; and
• the award is neither contrary to a Greek court decision issued on the same matter, which is res judicata for the parties involved, nor is contrary to Greek public policy rules.

Again, the Greek court will not re-examine the merits of the case but only assess whether the fulfilment of the above exists.

A foreign lender's ability to enforce its rights under a loan or security agreement could be impeded if it were to be ruled that the said enforcement action is inconsistent with the principles of good faith and proportionality. The Greek courts could interpret this as an abusive exercise of rights and consequently render the agreement void.

The commencement of insolvency proceedings in Greece may influence a lender's ability to enforce loans, security interests, or guarantees. Once a petition is filed for the declaration of insolvency, the court may take preventive measures to protect the debtor's estate and prevent actions that could harm its creditors. Such measures may include suspending individual enforcement actions by creditors or prohibiting any transfer of assets from or to the debtor. In this pre-insolvency stage, enforcement actions by unsecured lenders may be suspended until the insolvency decision is published. In contrast, secured creditors are largely unaffected by preventive measures and may be enforced against the secured assets, except in cases where there is a valid request to sell the business as a going concern and thus realise more value. Finally, creditors secured with financial collateral maintain a privileged position, being completely excluded from the scope of the preventive measures and may be enforced immediately.

During the insolvency stage, all individual enforcement actions are suspended. However, secured creditors are exempt from such suspension regarding assets over which they hold security for a period of nine months from the declaration of insolvency. After the expiry of this period, suspension extends to secured creditors' enforcement actions. Exceptionally, individual enforcement actions of secured creditors are suspended in cases where the court decision rules the sale of the business assets as a going concern or of its individual operating units and the asset over which security has been granted forms part of these assets. In both cases, if the sale process is terminated because no satisfactory offers were received or 18 months have elapsed since the insolvency declaration without any pending auction, secured creditors regain their right to enforce for a period of nine months after the termination date. After this period, enforcement actions are suspended for them as well. The seizure of an asset from the insolvency estate by a secured creditor remains effective until the sale of such asset through public auction or the reversal of the seizure. Again, during the insolvency process, financial collateral takers are not impacted by the suspension and can continue to enforce their rights without restrictions.

Insolvency law allows for super-senior ranking of the creditors' claims arising out of new financing in the context of rehabilitation. The super-senior privilege applies to financing provided to keep the business operational, either in the form of cash, loans, or essential goods and services. The purpose of this provision is to incentivise lenders and suppliers to offer necessary funding to keep the debtor's business afloat during the rehabilitation phase, as these monies are vital for business continuity and for underpinning the restructuring efforts.

In all other respects, the payment order of the creditors on a company's insolvency traces the prioritisation established in the Greek code of civil procedure.

Insolvency processes may take up to five years, from submitting the insolvency petition to the company's discharge. A typical insolvency process may take two years to complete.

The insolvency law enacted in 2020 is currently in force and aims to streamline proceedings, improve recovery rates for creditors, and balance the interests of both debtors and creditors. However, recoveries for creditors are not always commensurate with the value of the company at the time of entering insolvency proceedings. Delays, administrative inefficiencies, and volatile market conditions may impact the realisable value of assets.

There are two available company rescue procedures outside of insolvency proceedings in Greece.

The first is an out-of-court debt settlement, which is an electronic platform-based process where the debtor negotiates and enters into a debt restructuring agreement with certain creditors, including financial institutions and the Greek state. This procedure does not require court involvement or any ratification, making it a faster and less formal alternative to judicially-driven insolvency procedures.

The second one is a rehabilitation procedure involving a more structured approach, where the debtor and its creditors negotiate a rehabilitation agreement, including a business plan for restructuring the company's debts. Unlike the out-of-court process, the court must ratify the rehabilitation agreement to become binding on all parties, ensuring that it treats creditors fairly. It may allow the company to avoid insolvency by restructuring its obligations under the supervision of the court.

Both mechanisms are designed to offer flexibility and efficiency, encouraging the resolution of financial distress before insolvency proceedings become necessary.

When a borrower, security provider, or guarantor becomes insolvent in Greece, lenders may face the following risks:

• Automatic stay on enforcement: upon the declaration of insolvency, a temporary stay may be imposed on creditors' enforcement actions, which can delay lenders from realising their security. While secured creditors maintain priority, their ability to immediately enforce security may be limited, particularly during restructuring efforts.
• Claw-back of transactions: lenders face the risk of clawback actions, which can nullify transactions made in the period leading up to the insolvency declaration. This can include preferential payments or transfers of assets that occurred within a "suspect period" prior to insolvency.
• Challenges to guarantees: guarantors may attempt to escape liability if the guarantee is not structured to cover amendments to the loan or changes in the financial status of the borrowing company.
• Decline in the asset value: delays in the liquidation process or deteriorating market conditions may reduce the value of the assets securing the credit, further impacting the recovery for secured creditors. If liquidation is not completed within 18 months, piecemeal liquidation might be forced, which can yield lower returns.

The project finance activity has been notable in the last years due to EU funding opportunities such as the Recovery and Resilience Facility (RRF) available to backstop private sector investment in response to the country’s effort to achieve its environmental and climate targets, support its digital transformation and modernise its infrastructure.

The main players sourcing project financing are in the energy industry, followed by transport, tourism, real estate, telecommunications and digital infrastructure. There are also some project financings used for waste and water management facilities.

Recent deals in the energy sector span from modest solar PV installations and wind farms to projects like the installation of submarine cables for the interconnection of islands with the IPTO.

Projects implemented via PPP structures continue to gain momentum in Greece. Recently, the Ministry of Economy and Finance announced that the construction and operation of the Governmental Park "Andreas Lentakis" will be carried out through a PPP tendering process. Other major projects realised through a PPP include the construction of the new Panathinaikos Stadium in Votanikos, which was awarded to the joint venture TERNA SA, AKTOR A.T.E. and METKA ATE, the construction of the first section of the Northern Road Axis of Crete (VOAK) from Hersonissos to Neapolis sponsored by TERNA, Aktor and Intrakat.

Law 3389/2005 provided the foundational legal framework for Public-Private Partnerships (PPPs) in Greece, facilitating collaboration between the public and private sectors in delivering infrastructure projects and public services. The law simplified the previously cumbersome process, contemplating that the PPP projects can be implemented upon approval from the Interministerial PPP Committee.

Law 4412/2016 and 4413/2016 govern public procurement in Greece, designed to align with EU legislation, cover the procurement of public works, supplies, and services and apply to both public sector agencies and entities active in regulated industries.

Significant reforms to Law 4412/2016 were introduced with the enactment of Law 4782/2021, which modernised the public procurement processes. Among the key changes are the thresholds below which direct awards are permitted, the mandatory use of the National Electronic Public Procurement System for contracts valued at EUR30,000 at a minimum, as well as the option to resolve disputes through arbitration for public contracts with a cost budget of at least EUR10 million.

There are no prohibitions or other restrictions on the types of projects that can be executed as PPPs.

There is no requirement under Greek law that the project documents should be governed by Greek law. The parties are free to choose the law of a foreign jurisdiction to govern the project contracts.

For more, see 6.2 Foreign Law and Jurisdiction and 6.3 Foreign Court Judgments.

In principle, there are no restrictions on foreign entities' ability to own or have real estate property in Greece. Certain restrictions apply to the acquisition of real estate located in the designated border areas of Greece by legal persons with seats outside the EU, in which case special authorisation needs to be granted by the competent public authority; otherwise, the acquisition is void.

Foreign lenders can directly exercise remedial rights on mortgages and prenotations of mortgages created on an intangible asset in the same manner as a domestic lender would (see also 3.2 Restrictions on Foreign Lenders Receiving Security).

The various business objectives and motivations of the respective sponsors will dictate the appropriate legal structure for the project company. Commonly, sponsors combine their efforts with those of other entities by forming horizontal or vertical joint ventures. This is particularly seen in the construction and management of large, complex projects that require substantial capital outlays or resources, proprietary knowledge, or management skills, which each of the participants lacks individually.

When structuring the deal, key issues will be the amount of risk and cost-sharing, the level of control and ownership structure the participating firms wish to have, and the governance mechanism. The project company may assume any legal form available in the Greek system. In most cases, the project company is organised as a private, unlisted company (société anonyme). If this legal form is chosen, then Law 4548/2018 on the reform of Sociétés Anonymes will apply. Apart from other advantages, such as being a separate legal entity and the limited liability of the shareholders, a project company organised as a société anonyme can have greater access to funding, as it can issue bond loans. Bond loans offer beneficial tax treatment compared to other credit arrangements and flat fees for the registration of the registrable collateral.

Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the European Union may be relevant to some projects. The Regulation does not lay down blanket prohibitions but allows for nuanced controls, especially concerning national security and public interests.

For more information, see 8.4 Foreign Ownership.

In the Greek market, projects are predominantly financed by local and international commercial banks, with bond loans being the most common structure. We have also witnessed projects involving significant import of foreign equipment or technology to rely on export credit agencies, providing guarantees or directly lending. Multilateral institutions also play crucial roles by providing long-term financing, guarantees, and co-financing solutions in large-scale projects. Blended financings are also frequently seen in project finance deals. Multilaterals often combine their resources with governmental programmes (such as Greece's Recovery and Resilience Facility) to de-risk investments and attract private investment.

Generally, there are no statutory limitations on the export of natural resources from Greece. Due to recent geopolitical tensions, the EU has imposed comprehensive export restrictions targeting specific countries. These sanctions include bans on the export of goods that might contribute to these countries' military, technological, or industrial capabilities. Export prohibitions apply to dual-use goods, advanced technology items, and certain energy-sector equipment, aiming to curb the sanctioned countries' military and economic infrastructure.

Law 4014/2011, as amended by Law 4685/2020 and 4819/2021, on the environmental licensing of projects and activities, governs, among others, the environmental impact assessment process for the construction of projects and the procedure for the issue of a Decision on Approval of Environmental Terms based on the project’s environmental footprint.

The regulatory body overseeing environmental laws is the Ministry of the Environment, Energy and Climate Change oversees these approvals.

Health and safety laws are also in place, which must be adhered to. The Hellenic Labour Inspectorate is responsible for the inspections and enforcement of such rules.