Project Finance 2025 Comparisons

In Greece, the main lenders in project finance transactions (either bilaterally or as a syndicate) are domestic credit institutions, which are regulated under the Banking Law (Law 4261/2014) and supervised by the European Central Bank or the Bank of Greece, as applicable. Foreign credit institutions of the private sector also participate in project financing and in certain cases IFIs are also lenders.

Project sponsors in Greece are typically part of large corporate groups (mainly multinational but also domestic) and also members of international funds active in the relevant industry (primarily in the energy sector). The sponsors provide funding through equity contributions or intragroup loans to subsidiaries or to special purpose vehicles (SPVs) established for specific projects.

SPVs are most commonly structured as non-listed sociétés anonymes (Greek public limited companies) under the Company Law (Law 4548/2018). They have independent legal personality and limited liability, meaning they are responsible for their own debts only through their assets.

Public-private partnerships (PPPs) in Greece are structured as long-term agreements between private companies and public authorities. Typically, these arrangements involve the creation of SPVs, which are set up solely to deliver services or carry out projects within the public authority’s responsibilities.

The legal framework for PPPs is established by the PPP Law (Law 3389/2005), as amended and in force.

Key Legal Elements

Under Law 3389/2005, several core conditions usually apply:

• The project must concern a public service or infrastructure within the remit of state or local authorities.
• Private financing must form part of the structure.
• The private partner should assume a significant share of the operational or financial risk.
• The overall budget should not exceed EUR500 million.

In exceptional cases, the Inter-Ministerial PPP Committee may approve projects that do not fully meet the above criteria, provided its decision is unanimous.

Distinctive Features

A key feature of Greek PPPs is that the public authority does not enter into a contract directly with the private sponsor but with an SPV, incorporated as a société anonyme, established specifically for the project. Sectors like national defence or judicial functions are excluded from the scope of PPPs, as they are under the sole responsibility of the Greek state.

Benefits

• Supports public budgets by leveraging private funding.
• Encourages infrastructure development and economic growth.
• Promotes private investment opportunities.
• Enables efficient allocation of risks.

Challenges

• Lengthy and complex approval procedures.
• Limited flexibility due to long-term commitments.
• Administrative inefficiencies or lack of co-operation by public bodies.
• Potential conflicts during project implementation.

In Greece, project financings are typically structured using a combination of equity and debt. The project company usually draws on capital provided by sponsors – through either share capital contributions or subordinated shareholder loans – alongside financing from lenders, which can include Greek or international banks.

A crucial aspect when structuring a deal is whether the financing will have the form of a bond; this is governed by a specific legal framework (ie, Law 4548/2018 and Article 14 of Law 3156/2003) and may be issued only by entities having the legal form of a société anonyme. Under this legal framework, the provision of the bond and all agreements related thereto (including the security documents) are exempt from any direct or indirect tax, including capital gains tax, fees, whether contributory or not, the Digital Transaction Duty (which replaced the stamp duty), the contribution/levy of Law 128/1975, and any commission, right or other charge in favour of the state or third parties (including registration fees in respect of securities, which are equal to a minimal amount – see 2.3 Registering Collateral Security Interests).

Key Considerations

• Risk assessment: The lenders verify that the sponsors have sufficient resources to fund the project and thus require clear evidence of the origin of these funds. This proof of funds is essential for evaluating financial viability.
• Security arrangements: Adequate security is crucial to ensure full repayment of debt. Typical structures include pledges over project receivables and the creation of security interests over the borrower’s assets (including shares, accounts, claims against third parties, etc).
• Financial performance metrics: The lenders assess the project’s ability to meet its obligations through covenants such as the Debt Service Cover Ratio, interest coverage, leverage ratios and cash flow projections. Regular monitoring of these metrics helps ensure that the project can sustain its financial commitments over time.
• Business plan and due diligence: A detailed business plan and financial model with substantiated cash flow projections is critical. Legal due diligence on, among other things, project licences, contracts in respect of receivables and land rights helps identify potential risks, allowing lenders to include tailored undertakings or default provisions in the financing agreements.
• Debt-to-equity balance: Careful calibration of the debt-to-equity ratio ensures adequate capitalisation while keeping debt obligations manageable.

This structured approach allows lenders to mitigate risk while enabling sponsors to secure the capital needed for project completion.

The energy sector is expected to remain highly active for project finance in the coming year. Over recent years, there has been a significant focus on renewable energy projects, particularly wind and solar power. These initiatives are supported by government incentives, EU funding programmes and the broader global push towards sustainability and carbon reduction.

Key Drivers

• Renewable energy expansion: Developers are increasingly investing in wind farms, solar parks and hybrid energy systems. Long-term power purchase agreements and a stable regulatory framework make these projects attractive to both local and international lenders.
• Infrastructure modernisation: Grid upgrades and energy storage solutions are complementing renewable energy projects, creating additional financing opportunities.
• Private and public investment: Both private sponsors and public entities are actively participating, often combining equity contributions with structured debt financing.
• Cross-border participation: International banks and institutional investors are drawn to renewable projects due to their predictable cash flows and established project structures.

Beyond energy, sectors that are expected to see rising activity include logistics, transport, digital and traditional infrastructure, and data centres. Growth in e-commerce, increasing demand for reliable connectivity, and the expansion of cloud services are driving investment in logistics and digital infrastructure. Similarly, transport projects are gaining traction as mobility and regional development initiatives accelerate.

These sectors are increasingly attracting a mix of local and international financing, reflecting wider market opportunities and investor interest beyond the traditional energy space.

In Greek project finance transactions, the project company, as borrower, typically provides security over its assets. Sponsors also provide pledges over their shares and claims under shareholder loans, and may issue a corporate guarantee or enter into a sponsor support agreement, committing to provide equity through share subscriptions or subordinated debt.

Typical Security Package

Security commonly covers:

• rights and receivables under project contracts (eg, construction agreements, power purchase agreements, operation and maintenance agreements, or leases);
• insurance proceeds, hedging arrangements and bank accounts;
• receivables from the Greek state as contracting authority and VAT refunds;
• movable assets such as equipment, securities or intellectual property rights, and also infrastructure assets such as wind turbines or solar systems; and
• real estate through a mortgage or a mortgage pre-notation (which is convertible into a full mortgage).

Formalities and Perfection

• Mortgages and mortgage pre-notations require either a court order or a notarial deed and registration with the competent land registry or cadastre.
• Pledges or assignments of receivables and rights are perfected through registration in the Digital Pledge Registry under Law 5123/2024, which replaced the older regime of Law 2844/2000. Additionally, a notice to the underlying debtor is served through a court bailiff.
• Non-possessory pledges over movable assets are also perfected through registration in the Digital Pledge Registry. They remain valid until deregistered, with no need for extensions.
• Share and bond pledges must be registered in the Digital Pledge Registry and recorded in the shareholders’ or bondholders’ register and annotated on certificates, where applicable.
• Personal or corporate guarantees by third parties must always be in writing to be enforceable.

The common law concept of a security trust is not recognised in Greece.

In bonds governed by Greek law, collateral may be granted to a bondholder agent, typically a bank or investment firm. The agent acts as security agent, holding the security on behalf of the bondholders, and acts in both judicial and extrajudicial matters, including enforcement, following the instructions of the bondholders.

Other than a Greek bond structure, a parallel debt arrangement may allow a security agent to act for all lenders, or each lender may hold security only for its own claims. Alternatively, each lender may obtain its own security interests securing its own claims separately.

Greek law recognises floating charges, allowing companies to secure all their present and future assets or claims under a certain category of the same (provided the assets or claims are identifiable or capable of being defined at the time the pledge is created) without transferring possession.

These arrangements do not constitute universal securities as in other jurisdictions but exist in parallel with the other securities (see 2.1 Assets Available as Collateral to Lenders) and they may include movable property, receivables, inventory, or groups of assets with a variable composition.

To create such a pledge, parties must:

• conclude a written or electronically signed agreement between the pledgor (owner) and pledgee (creditor); and
• register the pledge in the Digital Pledge Registry, which ensures its effectiveness against third parties.

Registering collateral in Greece involves registration fees and, in some cases, notarial or professional fees. However, under a Greek bond structure, exemptions provided by Article 14 of Law 3156/2003 apply.

Bonds

• Registration fees for security documents – including floating charges, assignments of claims against third parties, share and bond pledges, and mortgages – are capped at EUR100 per registration, plus VAT.
• Notarial fees, lawyers’ fees and charges for third-party rights are limited to EUR2,500 plus VAT when calculated on an ad valorem basis, eg, for preparing and executing a mortgage by notarial deed, and to EUR200 in other cases.

Other Finance

• Registration fees for similar security documents are generally around 0.775%–0.875% of the secured amount, without a cap.
• Notarial fees for mortgages typically range from 0.2% to 1% of the secured amount. For mortgage pre-notations, court fees usually do not exceed EUR500.

To create a valid security interest under Greek law, the item of collateral must be adequately defined. Security over future assets can also be granted, provided they are identifiable or capable of being defined at the time the security is created.

For specific assets such as real estate or individual movable items, the security document must clearly identify the particular asset. Mortgages, for example, require precise identification and registration in the relevant land registry.

For floating charges or non-possessory pledges covering groups of assets – such as equipment, inventory or other movable property – a general description (including the address where the assets are located and their use) of the types of collateral is sufficient, provided the assets have distinctive characteristics. This allows lenders to secure both present and future assets efficiently without the need to amend the security documents each time the composition of the assets changes.

Restrictions on Related Party Transactions

Non-listed Greek sociétés anonymes

Under Law 4548/2018, as currently in force, the granting of upstream or cross-stream (horizontal) securities or guarantees to third parties (lenders), ie, from a Greek société anonymesubsidiary in favour of its parent company, or from a lower-tier subsidiary in favour of the ultimate parent, or between “sister” subsidiaries, is generally prohibited, unless specific approval is granted by the board of directors or, in certain cases, the general meeting of the subsidiary providing the security.

By contrast, the granting of downstream securities or guarantees, ie, by a Greek société anonyme parent company to third parties (lenders) in favour of its subsidiaries, does not fall within the restrictions of Articles 99 et seq of Law 4548/2018, which govern related party transactions. Such downstream securities or guarantees may therefore be validly executed without requiring special approvals.

Listed Greek sociétés anonymes

For listed Greek sociétés anonymes, the legal framework governing related party transactions is considerably stricter. Any granting of securities or guarantees in favour of related parties (as defined according to IFRS 24 and IFRS 27, including, among others, parent companies, subsidiaries or sister companies) – whether upstream, downstream or cross-stream – is subject to the requirements for special approval in the context of the related party transaction regime of Articles 99 et seq of Law 4548/2018, as currently in force.

Requirement for special approval of related party transactions

The provision of securities and guarantees by a (listed or not) Greek société anonyme to third parties in favour of a related party (as described above) must be approved by its board of directors or, in certain cases, by its general meeting. Such approval is valid for up to six months and is also subject to publication requirements with the Greek General Commercial Registry. Failure to comply with the mandatory approval requirements of Law 4548/2018 renders the transaction null and void.

Exceptions from the approval obligation

Under Law 4548/2018, as currently in force, certain transactions are explicitly exempted from the special approval obligation as detailed above, the most notable being:

• transactions falling within a company’s ordinary course of business;
• transactions of a company with its shareholders, provided these are offered to all shareholders of the company on the same terms, where equal treatment of all shareholders and the protection of the interests of the company are ensured;
• transactions of a company with its sole shareholder, which should only be recorded in the minutes of the general meeting or the board of directors, as the case may be, or shall be drafted in writing upon penalty of nullity; and
• transactions of a company with its wholly owned (100%) subsidiary.

Financial Assistance Rules

Under Article 51 of Law 4548/2018, sociétés anonymes are restricted from providing financial assistance for the acquisition of their own shares or those of their parent company. This includes loans, guarantees or advances made to third parties for such purposes. Credit institutions are exempt from this restriction.

Permitted exceptions

Financial assistance may be permitted if strict conditions are met. These include the following:

• Shareholder approval: The general assembly must approve the transaction with an increased quorum and majority.
• Board report: The board of directors must prepare a detailed report explaining the reasons for the transaction, its terms and the risks involved, demonstrating that the transaction aligns with the company’s best interests.
• Auditor’s review: If directors of the issuing or parent company are directly or indirectly involved, an auditor’s opinion is also required.

Such transactions must follow market practice, ensuring that the company receives fair consideration (eg, adequate interest or collateral). The total amount of financial assistance must be recorded as a non-distributable reserve and may not reduce the company’s equity below the level of its share capital and statutory reserves.

The same restrictions extend to subsidiaries, which are not permitted to provide financial assistance for the acquisition of shares in their parent company.

Lenders typically rely on public registries and due diligence to confirm whether collateral is free from prior encumbrances.

• Real estate: Mortgages and mortgage pre-notations must be registered with the local land registry or cadastre. These records are searchable, and lenders will usually obtain certificates confirming the status of title and existing encumbrances.
• Movable assets and receivables: Non-possessory pledges and assignments of receivables are registered in the Digital Pledge Registry (recently introduced by Law 5123/2024). Searches should also be conducted in both the Digital Pledge Registry and the previous pledge registry operating at local level under Law 2844/2000 to ascertain the existence of prior pledges or floating charges.
• Shares and bonds: Pledges must also be recorded in the issuer’s shareholders’ books or bondholder register (and endorsed on the relevant share/bond certificates), in addition to registration in the Digital Pledge Registry.

Beyond registry searches, lenders often require contractual protection, such as representations and warranties and negative pledge covenants. These measures supplement registry checks and mitigate the risk of undisclosed liens.

The release of security in Greece generally depends on the type of collateral and the manner in which it was created (so similar actions as for its perfection shall take place):

• Mortgages and pre-notations: A mortgage or mortgage pre-notation is released through registration of a discharge at the competent land registry or cadastre. This requires either a notarial deed or a court order confirming that the secured obligations have been satisfied.
• Pledges and assignments of receivables: Non-possessory pledges and assignments registered in the Digital Pledge Registry are released by filing a deregistration notice. For assets delivered physically, the encumbered asset must also be returned to the pledgor. Notification to third parties or debtors may also be required (in the case of assignment of claims).
• Share and bond pledges: Release involves deregistration from the Digital Pledge Registry and appropriate endorsement/annotation in the relevant shareholders’ or bondholders’ registers and share/bond certificates.
• Third-party guarantees: Guarantees are typically released automatically once the underlying obligations are discharged, though formal written confirmation is often requested.

In all cases, lenders usually provide formal release or discharge documentation to confirm that the collateral is free from encumbrance, protecting both the borrower and any subsequent parties with an interest in the assets.

A secured lender in Greece may enforce its collateral when an event of default occurs under the relevant finance documents. Enforcement is governed primarily by the Greek Code of Civil Procedure, while certain types of collateral are also subject to specific legislation, such as financial collateral agreements or pledges over claims provided in favour of banks.

Enforceable Title

Lenders must generally hold an enforceable title, such as a non-appealable judgment, notarial deed, payment order or arbitral award. Without such a title, a lender cannot proceed with the seizure or liquidation of collateral.

General Procedure

For monetary claims, enforcement typically involves:

• seizing the debtor’s assets;
• allowing other creditors to intervene;
• liquidating the seized assets through public electronic auction; and
• distributing proceeds among creditors.

Certain claims have statutory priority (defined as general privileges under the law): claims by the state, public entities and social security authorities, and claims for wages, receive at least 25% of the proceeds, while secured creditors (holding collateral over the specific asset) are entitled to at least 65%, and the remaining 10% is allocated to the unsecured creditors. In the case of concurrence of creditors with secured and unsecured claims, 90% is allocated to secured creditors, while the remaining 10% is allocated to the unsecured creditors. In the case of concurrence of claims with general privileges and unsecured claims, 70% of the proceeds is allocated to the general privileged creditors, and the rest to the unsecured creditors.

It should be noted that a reform of the Greek Code of Civil Procedure has been recently introduced. A new provision has been added to the Code as regards the ranking of the creditors. This new provision applies to new financing agreements (those that were signed after the new provision came into force) that are secured with a pledge or a mortgage over assets that are free of any encumbrance. According to the new provision, creditors are ranked as follows: (1) employment claims; (2) creditors with secured claims over the assets that are being liquidated; (3) generally privileged claims; and (4) unsecured claims. Notably, this provision has come into force in parallel with the existing provisions (if the requirements of the new provision are met, the new provision applies; otherwise, the old provisions apply).

Special Rules

• Pledges over claims or rights: Under Law 5123/2024, a pledgee may collect pledged claims directly, without court intervention, after ten business days from the claim’s maturity.
• Shares and pledged movables: Enforcement follows the general provisions of the Greek Code of Civil Procedure, requiring an enforceable title and, typically, a public auction for liquidation.
• Possessory or non-possessory pledges under Legislative Decree 17.7.1923: The pledgee may enforce such pledge directly by serving an order for payment without resorting to court proceedings.
• Financial collateral: Law 3301/2004 permits satisfaction through sale, set-off, or application of the pledged instruments or cash to discharge the secured obligations.

As mentioned in 2.1 Assets Available as Collateral to Lenders, Greek law does not recognise a trustee holding security for multiple creditors. In bonds governed by Greek law, however, collateral may be granted to a bondholder agent, who acts as the security agent holding the security on behalf of the lenders and enforces it, applying proceeds pro rata to their claims unless otherwise agreed.

In principle, Greek law allows parties to a contract to select a foreign law as the governing law. Such choice is generally recognised and enforceable by Greek courts, provided it does not conflict with mandatory provisions of Greek law or public policy. Overriding provisions, such as those safeguarding the constitutional, social, political or economic order of Greece, cannot be waived and will apply regardless of the chosen foreign law.

Similarly, parties may agree to submit disputes to a foreign jurisdiction, and Greek courts will generally respect such agreements. Exceptions arise in specific contexts. For example, under Law 4413/2016 on Concession Contracts, disputes concerning concession agreements falling within the scope of the said Law must be adjudicated by the courts of the awarding authority’s seat. Likewise, disputes relating to PPP arrangements are subject to arbitration in accordance with the applicable PPP legislation.

A foreign judgment can generally be enforced in Greece without re-examining the merits, depending on the origin of the judgment and applicable treaties or regulations. Judgments issued by courts of EU member states are enforceable under EU Regulation 1215/2012, which allows recognition and enforcement without retrial.

For non-EU countries, judgments based on an exclusive choice-of-court agreement in a jurisdiction that has ratified the Hague Convention on Choice of Court Agreements (such as the United Kingdom) are recognised and enforceable under the Convention, subject to its conditions.

Judgments from non-EU states that have not ratified the Hague Convention, or judgments based on non-exclusive choice-of-court agreements in Convention states, may be enforced in Greece through a procedure under Article 905 of the Greek Code of Civil Procedure. Enforcement requires that the foreign judgment meets certain criteria, including proper jurisdiction, service of process, and compliance with Greek public policy.

Greece is also a party to other bilateral and multilateral agreements on recognition of foreign judgments.

With respect to arbitration, Greece has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the 1923 Geneva Protocol on Arbitration Clauses and the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards, subject to reservations. Consequently, foreign arbitral awards are generally enforceable in Greece without retrial, provided that they comply with the formal requirements and public policy considerations under Greek law.

Under Greek law, there are generally no significant legal obstacles that would prevent a foreign lender from enforcing its rights under a loan or security agreement, provided the agreement is governed by Greek law and properly documented.

Greek legislation does not impose a general prohibition on foreign lenders granting loans to Greek borrowers. Permissibility depends on whether the lender operates within the EU/EEA framework or originates from a third country.

EU/EEA Lenders

Credit institutions authorised in an EU/EEA member state may provide loans in Greece under the EU passport regime, either by establishing a branch or on a cross-border basis, without a separate licence from the Bank of Greece. These institutions remain supervised by their home authority but must comply with applicable Greek law when lending locally.

Non-EU/EEA Lenders

Credit institutions from outside the EU/EEA require a prior licence from the Bank of Greece if they wish to establish a branch and engage in lending activities in Greece.

Greek law does not impose restrictions on granting security or guarantees in favour of foreign lenders. Both domestic and international lenders may take collateral over Greek assets, provided that the security follows the formalities prescribed by Greek law.

Greece’s foreign investment regime is primarily governed by the recently enacted FDI Screening Law (Law 5202/2025), which introduced a national screening mechanism in line with EU Regulation 2019/452. The framework aims to safeguard national security and public order, particularly in relation to transactions involving non-EU investors or state-linked entities. While Greece continues to welcome foreign capital, investments in sensitive sectors are now subject to review, which could affect timing, cost and overall deal feasibility.

Scope and Critical Sectors

The FDI screening framework applies to investments meeting specific participation thresholds in certain sectors, namely:

• investments of 25% or more in energy, transport, health, ICT and digital infrastructure (eg, data centres, electricity storage, fibre networks, logistics hubs, cloud services); and
• investments of 10% or more in defence, cybersecurity, AI, port and underwater infrastructure, and tourism facilities in borderland areas.

Successive increases in holdings may also trigger review. Exemptions apply to portfolio investments, intragroup restructurings, and ongoing tenders with binding offers.

Regulatory Authorities

Screening is overseen by the Greek Inter-Ministerial Committee for the Screening of FDI (ICSFDI) and the Greek Ministry of Foreign Affairs, with the B1 Directorate of the latter acting as secretariat.

Screening Process

The FDI screening procedure involves the following:

• Submission: Investors file the FDI application with the B1 Directorate before completing the investment.
• Initial review: The B1 Directorate checks completeness within five days.
• Transmission: The file is forwarded to the ICSFDI within ten days.
• Preliminary Assessment: The ICSFDI conducts a review within 30 days, either granting clearance or initiating an in-depth investigation.
• In-depth review: If triggered, experts may be consulted, and the EU notified. The ICSFDI issues an opinion within 30 days (extendable to 60 days).
• Ministerial decision: The Minister of Foreign Affairs issues a decision within 30 days of the ICSFDI issuing its opinion. If no decision is made within 60 days, the investment is deemed approved.

Administrative Sanctions

Failure to comply with Law 5202/2025 may result in fines from EUR5,000 to EUR100,000, or up to double the investment value for prohibited transactions, false information or non-compliance with mitigation measures.

Practical Considerations

Foreign investors should:

• assess whether the investment falls under the law;
• prepare documentation thoroughly;
• engage early with authorities; and
• anticipate possible mitigation measures.

Greece generally allows the free transfer of capital, dividends and profits abroad, in line with its obligations under EU law. Foreign investors can repatriate returns, subject to the applicable tax requirements.

Withholding Taxes

Payments abroad are subject to withholding taxes, which may be reduced or eliminated under domestic law (transposition of the EU Interest and Royalties Directive in Greece) if the conditions of the law are met or under applicable double taxation treaties:

• Dividends: A 5% withholding tax in principle applies on dividends paid by Greek companies to non-resident parent companies. Relief may be available under the EU Parent–Subsidiary Directive subject to conditions such as, among others, a minimum 10% shareholding for at least 24 months. Relief or reduction may be also available under double taxation treaties.
• Interest: The withholding tax rate on interest is in principle 15%. Interest payments to foreign lenders – defined as entities or individuals that are tax residents outside Greece and do not have a permanent establishment in Greece – are subject to Greek withholding tax unless the exemption conditions of the law are met or unless a tax treaty provides otherwise. Interest paid on ordinary loans (not bonds) from credit institutions, whether they involve domestic or foreign lenders (licensed credit institutions), is exempt from withholding tax.

Undistributed passive income, such as dividends or interest, earned by foreign entities located in non-cooperative or preferential tax jurisdictions, and holding a participation of 50% or more in the share capital of a project entity in Greece, may be subject to taxation in Greece.

A project company established under Greek law is permitted to maintain foreign currency accounts both within Greece and abroad. This flexibility aligns with Greece’s adherence to EU regulations on the free movement of capital, which facilitates cross-border financial transactions.

In principle, project financing does not require the provision of governmental or regulatory consents. However, on certain occasions, a consent or registration may be required for the validity, enforceability or creation of rights. In infrastructure and energy financing, the provision of environmental licences is required for the construction and development of the project. Also, the perfection of security interests requires registration with the Digital Pledge Registry (see 2.1 Assets Available as Collateral to Lenders). Finally, in major public concessions, the designation and/or approval of the finance documents by the Greek state is usually required or advisable, depending on the terms of the relevant concession agreement.

Also, in the case of loans with the employment of funds made available under the Recovery and Resilience Facility (RRF), all projects must comply with the National Recovery and Resilience Plan guidelines and undergo eligibility and viability evaluations by commercial banks, which act as representatives of the Greek state for the RRF financing, and independent auditors. These include assessments for state aid compliance and alignment with EU and Greek legal frameworks. Also, filing and reporting obligations exist for RRF-funded loans throughout their tenure. Failure to comply with filing requirements, such as non-submission of loan agreements or audit reports, may affect the normal course of the financing process.

In general, the mere ownership of land does not, as such, require a licence. However, the use, exploitation or operation of land assets for commercial purposes (eg, extraction of minerals, generation of energy or operation of infrastructure) typically requires the prior grant of specific urban planning or environmental licences or permits from the competent public authorities, particularly in environmentally sensitive sectors.

Foreign investments are subject to compliance with state aid and environmental regulations. Foreign entities are, in principle, permitted to hold such licences either directly or through locally incorporated subsidiaries, subject to applicable foreign investment restrictions as set out in 4.3 Foreign Investment Regime.

The bond structure allows the provisions of Law 4548/2018 to be applied as regards the appointment of a bondholder agent. These provisions allow by statute the bondholder agent (typically a Greek bank or investment firm) to hold the security created under the security documents on behalf of all the lenders; the bondholder agent acts in its name but on behalf of the bondholders from time to time. The advantage of this approach is that whenever there is a transfer of bonds, no new registration or perfection steps need to be taken in connection with the security.

The common law notion of security trust is not recognised as such in Greece, so it may generally not be used for Greek-law security. Where the Greek bond structure is not used, a parallel debt structure is sometimes put in place; ie, the finance documents may provide that an entity designated as security agent will be a joint and several creditor with all the other lenders, so that the security documents held by the security agent actually secure such parallel debt obligation. Alternatively, each lender may obtain its own security interests securing its own claims separately. A lender may not hold security for another lender, as under Greek law security interests are accessory, so a security held by a lender should generally secure a claim of such lender.

The appointment of a bondholder agent is mandatory in all cases where bondholders are organised in a group. Bondholders must be organised in a group when a bond is either listed in an organised market, related to a securitisation or secured by in rem securities (eg, pledges or mortgages). It has been argued that such mandatory appointment does not apply to bonds governed by foreign law, though this has not been sufficiently tested in practice.

The law sets specific requirements for the entities that may act as bondholder agents, their duties and their level of liability (in line with what is acceptable in the international markets, Law 4548/2018 now allows a bondholder agent to waive its liability in the case of slight negligence).

It should be noted that Law 4548/2018 has introduced a provision whereby in the case of a bond agreement governed by a foreign law, in rem security and guarantees are granted to the person which, as per the law governing the bond agreement, may hold in rem security and guarantees in its name and on behalf of the bondholders. However, this approach has not been sufficiently tested in practice.

The priority of competing security interests is generally determined by the time of perfection of each security right. As a rule, earlier perfected security interests rank ahead of those perfected later over the same asset.

Other than through the civil law principle of priority determined by the time of perfection, subordination in Greece may also be achieved on a contractual basis. Contractual subordination is typically implemented through intercreditor agreements, under which subordinated creditors agree to rank below senior creditors with respect to priority in payment, security and enforcement rights.

While contractual subordination is recognised under Greek law, its effect in an insolvency process is subject to limitations. The contractual ranking between creditors will generally be respected inter partes but will not be binding on the insolvency administrator or other creditors, since Greek insolvency law provides a mandatory statutory ranking of claims. Accordingly, contractual subordination provisions may not fully survive the insolvency of a debtor incorporated in Greece, and subordinated creditors may still participate in distributions according to the statutory order of priority as set out in 6.3 Priority of Creditors.

Local law does not generally require that the project company be organised under the laws of Greece. However, for practical, regulatory and financing reasons, project companies are typically incorporated locally, particularly where the project involves ownership of immovable assets, operation of regulated activities, or the granting of governmental permits and licences.

Project companies in Greece usually operate in the form of non-listed sociétés anonymes (companies limited by shares) under Law 4548/2018, most commonly as SPVs established by the sponsors of the project. Sociétés anonymes are limited liability companies with a legal personality, which are solely responsible for their debts through their assets.

In the case of PPPs governed by Law 3389/2005, the SPV has to be established as a société anonyme. PPPs are long-term contracts between private entities and public bodies, under which SPVs are established with the sole purpose of providing services and/or implementing projects falling within the competence of the public body.

According to the new Bankruptcy Law (Law 4738/2020), restructuring is available as a collective pre-insolvency procedure, subject to the principle of non-deterioration of the creditors’ position. A restructuring agreement may be concluded between the debtor and a majority of its creditors, ie, those representing at least 50% of the debtor’s secured liabilities and at least 50% of the debtor’s other liabilities, providing for any arrangement of the debtor’s assets and liabilities. The restructuring agreement is subject to ratification by the court.

From the date of submission of the restructuring agreement for ratification by the court until the issuance of the court decision, all individual and collective enforcement actions against the debtor in respect of claims arising prior to such decision, as well as the imposition of injunctive measures and the set-off of pre-filing claims arisen, are automatically suspended. This moratorium shall, in principle, not exceed four months.

During this period, the court may also prohibit the termination of any agreements deemed material to the continuation of the debtor’s operations and may authorise the granting of financing to the debtor without requiring social security or tax liabilities clearance, until the issuance of the court decision.

In any case, the restructuring agreement shall not affect financing agreements secured by a financial collateral agreement governed by Law 3301/2004, unless the collateral taker expressly consents otherwise.

Following the filing of a bankruptcy petition, the competent court may order injunctive measures to prevent any change to the debtor’s assets or reduction in their value that could be detrimental to the creditors, until the decision on the bankruptcy petition is published in the Electronic Insolvency Register, which is when the injunctive measures automatically cease. Such measures shall neither affect the rights deriving from financial collateral agreements of Law 3301/2004 nor the rights of the assignee of claims under a security assignment agreement.

Upon the declaration of bankruptcy, all individual enforcement actions against the debtor are automatically suspended, except for individual enforcement actions by secured creditors (ie, creditors whose claims are secured by special privilege or real security on a specific asset of the debtor’s estate) which are allowed for a period of nine months after the declaration of bankruptcy. The claims of the secured creditors are satisfied by the liquidation of the asset on which the special privilege or real security exists in their favour. If the amount arising from the liquidation of such asset is not sufficient for the full repayment of the secured claim, the respective creditor shall seek satisfaction of the remaining amount from the bankruptcy estate.

By way of exception, individual enforcement actions by secured creditors are suspended where the bankruptcy judgment provides for the sale of the debtor’s business as a going concern or of individual operational units thereof, and the asset over which security has been granted forms part of the operational business to be sold.

The enforcement suspension provisions affect neither the provisions for the enforcement of financial collateral agreements of Law 3301/2004, nor the collection right over the debtor’s claims against third parties which had been pledged or assigned prior to the declaration of bankruptcy.

Pursuant to Law 4738/2020, upon a company’s bankruptcy/insolvency, the provisions of the Greek Code of Civil Procedure shall apply by analogy, subject to certain amendments thereto.

In particular, a creditor may commence the post-insolvency enforcement procedure. In particular, the auction proceeds are allocated, after deduction of the enforcement expenses, for the satisfaction of the creditors as follows:

• up to 25% to the satisfaction of the creditors with general privileges (eg, for social security contributions or tax);
• up to 65% to the creditors with secured privileges; and
• the remaining 10% is allocated to the unsecured creditors.

In the case of concurrence of creditors with secured and unsecured claims, 90% is allocated to the secured creditors, while the remaining 10% is allocated to the unsecured creditors.

In the case of concurrence of claims with general privileges and unsecured claims, 70% of the proceeds is allocated to the general privileged creditors, and the rest to the unsecured creditors.

It should be noted that a reform of the Greek Code of Civil Procedure has recently been introduced. A new provision has been added to the Code as regards the ranking of creditors. This new provision applies to new financing agreements (those that were signed after the new provision came into force) that are secured with a pledge or a mortgage over assets that are free of encumbrances.

According to the new provision, creditors are ranked as follows:

• 1) employment claims;
• 2) creditors with secured claims over the assets that are being liquidated;
• 3) generally privileged claims; and
• 4) unsecured claims.

Notably, this provision has come into force in parallel with the existing provisions (if the requirements of the new provision are met, the new provision applies; otherwise, the old provisions apply).

Upon the declaration of the debtor’s bankruptcy, unsecured creditors and creditors whose claims have a general privilege are captured by the collective and individual enforcement suspension. Thus, their claims will be ranked and satisfied according to the priority of creditors as set out in 6.3 Priority of Creditors.

Furthermore, and as noted in 6.2 Impact of Insolvency Process, the claims of the secured creditors are satisfied by the liquidation of the asset on which a special privilege or real security has been established in their favour. Accordingly, the proper perfection of the relevant security interests is of paramount significance to ensure enforceability and priority in insolvency. If the proceeds arising from the liquidation of such asset are not sufficient to fully repay the secured claim, the relevant creditor may seek satisfaction of the outstanding amount from the bankruptcy estate. Accordingly, a risk arises where both the liquidation proceeds and the bankruptcy estate may not be adequate to ensure full repayment of the secured lender. Under forced sale conditions, realisations of assets may be lower than expected in an orderly sale.

According to the provisions of Law 4738/2020, capacity for bankruptcy is vested in natural persons and legal persons pursuing an economic purpose. Bankruptcy capacity may also be conferred upon private-law legal persons that do not pursue an economic purpose but engage in economic activity. Legal persons governed by public law, public authorities in general and local authorities are exempt from bankruptcy proceedings.

With respect to credit institutions, investment firms and insurance undertakings, the following apply:

• Credit institutions are not subject to bankruptcy proceedings but to special liquidation proceedings under the Law 4261/2014.
• Investment firms may also not be declared bankrupt during their special liquidation conducted pursuant to Law 4514/2018 and until its completion.
• Insurance undertakings are likewise subject to liquidation proceedings under Law 4364/2016.

There are no specific restrictions or special taxes on insurance policies over project assets provided or guaranteed by insurance companies.

Claims of the project company under insurance policies over project assets are usually pledged/assigned in favour of the lenders of the project company, whether domestic or foreign. Accordingly, to the extent that the insurance policies over project assets allow such pledge/assignment, any proceeds under such policies are payable to secured creditors, whether domestic or foreign.

Payments of interest are in principle subject to withholding tax at the current rate of 15% unless the exemption conditions of the law are met (transposition of the EU Interest and Royalties Directive in Greece) or unless otherwise provided for under an applicable double taxation treaty (if any) between Greece and the foreign lender’s jurisdiction of tax residence. Payments of interest to domestic or foreign credit institutions under an ordinary bank loan are not subject to withholding tax. Withholding tax can be a significant consideration for lenders in Greek project financings, as it may impact projected cash flows.

Delays in VAT refunds in the context of construction projects are another significant consideration for lenders in Greek project financings, as they may impact projected cash flows. Also, the recently implemented Digital Transaction Duty (which replaced the stamp duty) that loan agreements attract in Greece currently stands at 2.4% on the principal amount and on the payment of interest, regardless of where the documents are executed or performed. Its cost may pose an additional financial burden, up to EUR150,000 per loan agreement; the persons liable for the payment of the Digital Transaction Duty are the debtors. Furthermore, there is the contribution/levy of Law 128/1975 on ordinary loans from credit institutions, currently standing at 0.6% per annum on the principal amount of a loan.

Such issues, along with withholding tax, are in practice mitigated through a contractually agreed provision of a tax gross-up clause and the structuring of the project financing as a bond under Law 4548/2018, since such form is exempted from the Digital Transaction Duty and the contribution/levy of Law 128/1975 (as per Article 14 of Law 3156/2003 – see 1.3 Structuring the Deal).

Non-bank interest rates are subject to a legal maximum for both the contractual and the default rates (currently standing at 7.40% for the contractual rate and at 9.40% for the default rate). Compound non-bank interest is permitted only to the extent such interest remains overdue for at least one year.

Contractual bank interest rates are not subject to a legal maximum. Floating interest rates are adjusted by reference to a transparent base rate, such as EURIBOR. However, the default interest rate charged by credit institutions shall not exceed 2.5% per annum over and above the contractual interest rate. The frequency of interest compounding may not exceed the frequency agreed for the servicing of the respective obligations under the applicable financing agreement.

Project agreements, such as concession agreements, engineering, procurement and construction (EPC) agreements, operation and maintenance (O&M) agreements, power purchase agreements with the state authorities, and shareholders’ agreements among the sponsors of the project company, are typically governed by Greek law. Where the contractor or a sponsor is a foreign entity, foreign law (typically English or German law) may be chosen for the relevant agreement, provided that such choice complies with Greek conflict-of-laws rules.

Financing agreements entered into by Greek project companies are typically governed by Greek law, particularly when the financing is provided by Greek credit institutions. Where the financing is provided by foreign credit institutions, the facility agreements may be governed by foreign law, such as English law.

All matters pertaining to the security interests over assets located in Greece or governed by Greek law (in the case of claims arising from contractual agreements), from the security documentation to security perfection, are governed by Greek law. When English law-governed hedging agreements are entered into between the project company and the lender (eg, using the ISDA documentation), it is customary for the corresponding hedging security agreement and its perfection to be governed by English law as well.

Finally, any matter relating to public law (such as construction permits, environmental permits, operating licences granted by Greek authorities, or concession agreements), regulatory compliance (such as environmental and safety rules), taxation (unless the provisions of a double tax treaty apply and override domestic tax law), employment and insolvency is mandatorily governed by Greek law, regardless of the choice of law in commercial contracts.