NRRP eligible costs: An IP is considered eligible for financing if it complies with the specific quantitative criteria set out under each pillar (e.g., at least 20% and 10% of eligible costs of the IP budget contributing to the objectives of investments tagged as green and digital, respectively), subject to also meeting certain additional qualitative criteria (relating, in particular, to the two pillars of innovation, research and development, and development of economies of scale through partnerships, acquisitions and mergers).

The categories of eligible costs shall be specific and restrictive. They include, for example, the purchase of land plots (to be closely linked with the IP and not to exceed 30% of the eligible costs of the IP), buildings, stadiums, equipment, intangible goods, payroll, consumables, operating expenses, transportation, working capital and marketing expenses.

Eligible costs must be incurred within the Greek territory and, likewise, the IP must be implemented within the Greek territory.

3. RRF Loans scheme and structure

Maximum coverage rate

RRF loans (RRF Loans) can cover a maximum of 50% of the total eligible investment cost of the IP (whereas if the IP is eligible under one of the NRRP pillars, the RRF Loan cannot be less than 30% of the IP budget),² while the private participation must cover at least 20% of the total eligible investment cost. It is important to note that private participation may come from own funds, subordinated loans or a contribution in kind, which must be directly linked to the eligible investment and may not exceed 10% of the eligible investment cost. Lastly, at least 30% of the total eligible investment cost must be covered through loans from commercial banks (Co-financing Loans). Commercial banks may grant further loans (in addition to Co-financing Loans) to cover ineligible IP costs (the Additional Loans).

Interest rate

The interest rate for Co-financing Loans and Additional Loans is determined by the market rate, at the discretion of the commercial banks. The minimum interest rate for the granting of RRF Loans is determined by ministerial decisions. According to the relevant decision of the Deputy Minister of Finance, the minimum interest rate is set:

• for small businesses, at 0.35%; and
• for other businesses, at 1%.

Since the above interest rate is the minimum, it can be higher; in practice, the interest rates in RRF Loans so far, are higher than the above minimum interest rates.

If the interest rate requested by the IP is equal to or higher than the reference rate (i.e. the “reference rate” as defined in Commission Communication 2008/C), then the RRF Loan does not constitute state aid, whereas if the requested interest rate is lower than the reference rate, then the RRF loan constitutes in principle state aid and the compatibility and compliance of the project with state aid rules must be further reviewed by an independent evaluator (please see below under paragraph 4).

RRF Loans: characteristics and terms

• The full drawdown of available RRF funds must be completed by 26 August 2026.
• RRF Loans and Co-financing Loans are treated equally (pari passu) and subject to the same security.
• All decisions regarding the restructuring of Co-financing Loans and RRF Loans are left exclusively to the commercial banks.
• No state guarantee is provided for either RRF Loans or Co-financing Loans provided by commercial banks.
• The funds made available under the RRF Loans must not be used for the purpose of refinancing other loans.
• RRF Loans are exempt from the Greek bank levy under Law 128/1975 (paragraph 3 of article 1).
• Bridge loans linked to an eligible investment may be financed by RRF funds, provided that: (a) they have been concluded after the submission of the application for the RRF Loan and (b) the relevant IP has been reviewed and deemed eligible in accordance with the applicable legal framework for RRF Loans.

4. Summary of the process

The allocation of RRF funds to commercial banks is made through the signing of an agreement with the state (Operational Agreement).³ which must contain the terms and conditions for the allocation of RRF funds (relating to the achievement of objectives, performance indicators, etc.) and a wide range of obligations (extensive obligations relating to monitoring, reporting to the Special Coordination Service for the RRF and the Investment Council, etc.).⁴

IP pre-approval: The investor must submit an online application via an interbank platform to the commercial banks, which assesses the economic viability/bankability of the project and the in-principle eligibility of the submitting entity and the IP (so as to exclude cases of manifestly ineligible IPs). It should be noted that the electronic submission of the request guarantees the date of submission, so that expenses incurred from this point onwards are considered eligible.

At this stage, the commercial banks must also check and verify that: (a) the eligible investments have “positive net present value”; (b) the financing decision is based on sound economic criteria and in line with their credit policy; (c) the IP constitutes an eligible investment falling within the scope of the NRRP pillars; and (d) the IP complies with state aid rules.

Evaluation of IP by an independent evaluator: The credit institution selects an independent evaluator through an automated process from a list of auditors, provided that there is no conflict of interest with the borrower.

The independent evaluator prepares an audit report on the proposed IP, in which it certifies, among others: (a) the eligibility of the IP; (b) the categorisation of IP expenditure into the five pillars of NRRP eligible costs; (c) the percentage of the RRF Loan, according to the eligibility criteria; (d) the compatibility of the RRF Loan interest rate with state aid rules; (e) the contribution of the IP to the objectives of the NRRP pillars of green transition and digital transformation; (f) the adherence of the IP to the “do no significant harm” principle introduced under article 17 of the Regulation (EU) 2020/852 of the European Parliament and of the Council; and (g) the IP’s avoidance of double financing of the investment through the RRF mechanism and other EU programmes.

Final approval of the IP, signing of finance documents and drawdown (upon fulfilment of drawdown conditions): Pursuant to the Operational Agreements (followed by an executive ministerial decision), the commercial banks fully represent the Greek state in the organisation, negotiation, preparation and signing of all finance documents required for the RRF Loans and are free to manage the credit relationship with the borrower (granting of waivers, loan restructuring, termination, lenders’ decisions to take additional measures, etc.) completely and at their sole discretion.

5. Main benefits of RRF Loans

• Immediate and direct processing of the RRF Loans without bureaucratic delays and obstacles in the selection and financing of eligible projects.
• Easy access for businesses to financing with low and viable interest rates (taking into account the large gap in interest rates for business loans between Greece and the EU average), which facilitates private investments and structural reforms.
• Granting of loans with market criteria through evaluation by cooperating commercial banks and certification of the required criteria by independent evaluators.
• Increased competitiveness and enhancement of Greece’s business environment, consequently improving Greece’s ranking in the “Ease of Doing Business” and other competitiveness indexes.
• Introduction of incentives for micro, small and medium-sized enterprises to increase economies of scale through mergers, conversions, acquisitions and collaborative schemes and platforms.
• Maximum funding from the RRF at 50% of the value of each investment, providing significant leverage to investors and reducing own capital costs.
• Activation of significant private funds (through the participation of banks and investors) towards investments in Greece.

Legal framework

• Regulation 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Mechanism
• The implementing decision of the Council of the European Union of 13 July 2021 approving the assessment of the recovery and resilience plan for Greece
• The Loan Agreement between the European Union and the Hellenic Republic ratified by article 2 of Law 4822/2021
• The NRRP
• Articles 197-201 of Law 4820/2021
• Ministerial decision No. 120535 (EX2021 30.09.2021) of the Deputy Minister of Finance
• Ministerial decision No. 120536 (EX2021 30.09.2021) of the Deputy Minister of Finance
• Ministerial decision No. 47990 (ΕΞ 2022 13.04.2022) of the Deputy Minister of Finance
• Ministerial decision No. 12027 (ΕΞ 2022 01.02.2022) of the Minister of Finance and the Deputy Minister of Finance
• Ministerial decision No. 85262 (ΕΞ 2022 23.06.2022) of the Deputy Minister of Finance

1. The NRRP pillar of extroversion also includes investments in the tourism sector and the RRF loan quota amounts to 40% of the IP budget, regardless of the investor’s financial status or IP revenue forecasts.
2. If an IP is not eligible under any of the NRRP pillars of (a) green transition; (b) digital transformation; (c) innovation, research and development; or (d) extroversion, due to not meeting the minimum percentages, then it is eligible for a stand-alone RRF Loan equal to 30% of the IP budget, provided that the total eligible costs of the IPs under the above pillars amount on aggregate to at least 30% of their budgets.If an IP is not eligible under any of the NRRP pillars of (a) green transition; (b) digital transformation; (c) innovation, research and development; or (d) extroversion, due to not meeting the minimum percentages, then it is eligible for a stand-alone RRF Loan equal to 30% of the IP budget, provided that the total eligible costs of the IPs under the above pillars amount on aggregate to at least 30% of their budgets.
3. Application for the signing of an Operational Agreement for RRF Loans may be submitted by Greek commercial banks, including credit institutions established and validly operating in an EU member state and having at least one Greek branch. European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) may also sign special agreements with the Greek state for the allocation of RRF Loans.
4. Commercial banks must allocate at least 38.5% of available funds from RRF Loans to eligible activities falling under the Green transition pillar and 20.8% to activities falling under the digital transformation pillar. Additional restrictions for commercial banks may also be provided for in the Operational Agreements.

In-depth 2024-001