Following the lull over the last few years, the Greek construction sector has placed its hopes of salvation on an investment spurt similar to, or even greater than that before the 2004 Olympic Games.
Market professionals estimate that funds adding up to 40-50 billion euros could be mobilized this decade for the realization of infrastructure projects, dozens of public-private partnership (PPP) and sustainable development works, and various private investments – or some €4-5 billion per annum.
These funds will come first from the European Union recovery fund (“Next Generation EU”), of which Greece’s share is estimated at €32 billion, then from the new Multiannual Financial Framework 2021-27 (known in Greece as ESPA), which is expected to fetch more than €20 billion, and of course from private capital to be leveraged through financing instruments by domestic banks and institutions such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).
For the time being, the focus is on PPP investments that are already under way in the form of building and road projects such as the Northern Crete Highway and the Kalamata-Pylos highway, among others. Several pending projects from the current Partnership Agreement for the Development Framework of the European Union (the ESPA program for 2014-2020) that have seen considerable delays are also expected to get under way through 2023.
Building modernization projects are the main subject of the European Commission proposals for the recovery fund. They provide for the leveraging of total funds of €110 billion per year across the EU (combining subsidies, loans, private capital, guarantees etc) that member-states could absorb to make energy upgrades to buildings. The recovery fund will also promote projects in the renewable energy sources sector. On top of all that, the construction sector is looking forward to the development of refuse management units, which will attract both public project constructors and building enterprises.
“The pandemic crisis has operated as a sort of wake-up call for Europe, so as to release huge quantities of funds and change its attitude toward infrastructure projects by adopting a more flexible fiscal policy for Greece too,” stated Christos Ioannou, chairman at construction firm Avax, at this month’s Delphi Economic Forum.