By the beginning of February, the banks contracted with the Ministry of Finance will address a public invitation to investors, in the context of their participation in the lending arm of the Recovery Fund.
It is essentially an information to the business world of the country, which will provide brief information on how the European package works, but also on the criteria for selecting beneficiaries and projects.
This invitation is a prerequisite for starting the whole process. Then each bank will be able to apply for the withdrawal of the first funds.
According to a banking source, in the first phase, 200 million euros will be deposited in the accounts of the four big banks at the Bank of Greece.
These will be the yeast for the first inclusion of projects in the Recovery Fund. From there, depending on the rate of resource depletion and the demand for investment by companies, the next installments will be requested.
A total of 12.7 billion euros are available, which together with bank leverage can lead to investments of even more than 30 billion euros in the country over the next five years.
It is noted, however, that even if this first money is credited to the banks, something that is expected to happen in February, the operation of the electronic application platform will be needed to launch the program.
It is in the implementation phase and is not expected to be ready before the end of the first quarter.
In combination with Development
The banks have also asked the government to clarify the framework for a company to join a Recovery Fund and a Development Law funding scheme at the same time.
According to a bank executive, “the landscape on this issue remains murky, despite assurances that investment co-financing from both development programs is possible.”
In this context, the banks have already been asked to have a meeting with the executives of the Ministry of Finance to determine the whole process, so that there are clear and detailed instructions on how a company can join both Development and Recovery Fund at the same time.
In addition, it has not yet been clarified what possibilities the companies that have already joined the Development Law since last year, have in terms of their participation in Recovery Fund actions.
Subsidies and lending
On the other hand, the first contacts were made in the previous days between FinMin and banks for their participation in subsidy programs that will be activated with the resources of the Recovery Fund.
The aim of the government’s financial staff is to combine the funds of the companies with bank loans to finance the projects with larger amounts, as is the case, for example, with the Savings.
However, according to information, from the first discussions there was no agreement, as the average amount of the loan needed to implement a specific program was very small.
Thus, the banks did not proceed with these discussions. It is noted that these programs will subsidize projects related to digitization, the primary sector and green investments.