The Hellenic Development Bank (HDB) offers a Green Co-Financing Loan Fund to support environmentally sustainable projects in Greece. This fund provides co-financing for initiatives that promote green energy, energy efficiency, and environmental protection. The objective is to facilitate the transition to a low-carbon economy and support sustainable development practices across various sectors.
Objective(s) and scope
The Green Co-Financing Loans Fund was established to provide favourable terms regarding investment loans to small and medium-sized enterprises (SMEs), offering 40% of the capital interest rate-free and a two-year partial interest subsidy upon the Financial Intermediary’s interest rate for the remaining 60% of the capital, for the implementation of Green Transition investment projects. Investment projects regarding Green Mobility, Energy Efficiency/Energy Upgrades, and Energy Production through Renewable Sources are supported.
The Fund aims to support SMEs to meet their investment purposes in implementing Green Transition projects that facilitate reducing emissions, protect the environment and reduce energy consumption costs.
The Fund provides 40% of the capital interest rate-free, while the remaining 60% is charged by the Financial Intermediary. Additionally, a partial interest subsidy (up to 3%) on the interest rate applied by the Financial Intermediary on its capital for the first two years of the loan is offered (starting from the first disbursement).
Financing value
The Green Co-Financing budget amounts to EUR 173 million, after a reallocation of resources between the three Funds of the Business Growth Fund, which was held in July 2023 (initial budget was EUR 200 million). Along with the participation of Financial Intermediaries by 60% in each loan, a total loan portfolio for the Fund of approximately EUR 415 million was formed.
The budget of the Fund is allocated to sub-programmes as presented below:
- Sub-programme 1 – Green Mobility Loans: Budget of EUR 20 million / Estimated loan portfolio of EUR 48 million.
- Sub-programme 2 – Energy Efficiency Loans: Budget of EUR 65 million / Estimated loan portfolio of EUR 156 million.
- Sub-programme 3 – Loans for Renewable Energy Sources: Budget of EUR 88 million / Estimated loan portfolio of EUR 211 million.
The Fund includes an interest subsidy for 2 years with an estimate of additional capital of EUR 15,57 million.
The loan amount may range from EUR 80.000 up to EUR 8.000.000, with the option of a cumulative maximum amount of EUR 8 million if applying for financing in any of the sub-programmes, as long as different business plans regarding the investments are submitted.
Eligibility criteria (if available)
The Fund applies to small and medium-sized enterprises that own a legal establishment and operate within Greece and were established up to the year of submitting the financing application to the Financial Intermediary.
Further information on eligibility criteria
The Financial Intermediary may request contractual and/or security in rem, in accordance with its credit policy. The maximum amount of collateral that can be required though cannot exceed 100% of the loan capital.
Additional information
The financial advantages for the SMEs are presented below:
- The capital part of the loans financed by the Fund (i.e., 40% of the capital of each loan) is interest rate-free.
- The Fund subsidizes a portion of the interest rate imposed by the Financial Intermediary upon its share of the capital (that is the remaining 60% of the loan). This subsidy applies for the first two years of the loan (starting from the first disbursement) and reduces the overall borrowing cost for the enterprise by 3% (i.e. 300 basis points), assisting the enterprise to save money.
- Each Financial Intermediary participating in the Fund is required to reduce the interest rate of each loan by at least 25 basis points (bps) per year compared to the interest rates that would be applied to equivalent financing without the Fund’s subsidy.
- The maximum amount of collateral that a Financial Intermediary may request for each financing cannot exceed 100% of the loan capital.
Potential SMEs must apply via:
- The Know Your Customer (KYC) platform of the Hellenic Development Bank S.A., which is available on the website. Each submitted application goes through a series of eligibility criteria assessments and upon relevant approval, the application is forwarded to the pre-selected Financial Intermediaries for the submission of a non-binding offer. Once the application is initially accepted by a Financial Intermediary, viz it receives a non-binding offer from the interested party, a unique KYC code is issued.
- The Information State Aid System (PSKE), which is available on the website. At this point the unique application number from the KYC platform (KYC code) is entered and the SME declares the Financial Intermediary from which it wishes to get financed and has already received the non-binding offer.
