Overview of RES and Infrastructure sectors in Greece of res and .pdfOverview of RES and Infrastructure sectors in Greece: | Page 5 of 13 January 2019 1 Macroeconomic Overview 344 335

Reliance Restricted

January 2019

Overview of RES and Infrastructure sectors in

Greece

Overview of RES and Infrastructure sectors in Greece: | Page 2 of 13

January 2019

1Macroeconomic Overview


January 2019

1 Macroeconomic Overview

Nominal GDP Growth & Inflation

Government Debt

Key indicators suggest that the Greek economy is on the verge of recovery

Current account deficit

► The current account deficit of c.15% in 2008 was reduced significantly mainlydue to lower consumer spending as a result of the austerity program.

► The austerity program is evident from the significant contraction of the economy, expressed both as a decline of GDP and through deflationary

pressures.

► The government debt (expressed as a % of GDP) remains at high levels,

however has stabilized in the last 4 years.

► All indicators suggest Greece is at a turning point, improving its

macroeconomic indicators (positive government balance, GDP growth, etc.), despite any hiccups in the short-term, such as elections in 2019.

-11.5%

-15.2% -15.1%

-12.3%-11.4%

-10.0%

-3.8%

-2.0%-1.6%

-0.2%-1.1% -0.8% -0.8%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

-60

-50

-40

-30

-20

-10

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Current account balance Current account balance (Percent of GDP)

374

305321 322

315320 323

181%

160%

178%180%

179%

183%182%

145%

150%

155%

160%

165%

170%

175%

180%

185%

190%

270

280

290

300

310

320

330

340

350

360

370

2011 2012 2013 2014 2015 2016 2017

€bn

.

General government gross debt General government gross debt, % of GDP

3.1%

1.0%

-0.9%

-1.4%-1.1%

0%

1.1%

-8.4-7.6%

-5.5%

-1.1% -1.3% -1.2%

2.0%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

-2%

-2%

-1%

-1%

0%

1%

1%

2%

2%

3%

3%

4%

2011 2012 2013 2014 2015 2016 2017

yoy

%ch

ange

Inflation Nominal GDP Growth

Source: International Monetary Fund, World Economic Outlook Database, October 2018


January 2019


Source: ELSTAT, International Monetary Fund, Bank of Greece, S&P Capital IQ, Oct 2018

FDI vs Unemployment rate

17,28616,287

19,605 19,712

24,788

29,119

35,378

27,14028,130

30,141

22,486

18,951 18,74317,750

22,11923,884

27.5%

0%

5%

10%

15%

20%

25%

30%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

€bn

.

Foreign direct investment in Greece Unemployment rate

Source: BoG, International Monetary Fund, World Economic Outlook Database, October 2018

Economic Sentiment vs. Real GDP growth

Economic Sentiment Indicator ► Greece’s economic sentiment index, after maintaining a net pessimistic position throughout most of 2008-16, returned to a net optimistic position in

December 2017.

► The increasing levels of investment over the last two years, combined with

improved government finances, suggest that Greece may soon experience inflows like similar EU countries (eg. Spain, Portugal and Cyprus), following

their own successful adjustment programs.

► Privatizations have played a key role in the recovery of Greek government finances, and have had a positive impact on the wider Greek economy.

There is still a significant pipeline of opportunities to come to market over the next few years.

Peak

New investments play a crucial role in the turnaround of the Greek economy

109 108

8487

8280

88 92

100

8895

101 101

100

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

>100 optimistic<100 pessimistic

Source: Eurostat

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

70

75

80

85

90

95

100

105

110

115

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

yoy

inde

x

Economic Sentiment Indicator (index) Real GDP Growth (yoy% change)

Source: Eurostat, International Monetary Fund, World Economic Outlook Database, October 2018

Oct 2018: 101


January 2019


344

335332

330324 324

188%

177%

169%163%

155%151%

100%

110%

120%

130%

140%

150%

160%

170%

180%

190%

200%

310

315

320

325

330

335

340

345

350

2018 2019 2020 2021 2022 2023

€bn

.

General government gross debt General government gross debt, % of GDP

4.0%

-1.8%

-4.8%

-8.4%-7.6%

-5.5%

-1.1% -1.3% -1.2%

2.0%3.0%

3.4% 3.7% 3.3%2.9% 2.9%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

100

120

140

160

180

200

220

240

260

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

€bn

.

Gross domestic product, current prices Nominal GDP growth rate, yoy % change

► The country’s recovery is projected to strengthen in the near-term, with real GDP growth expected to reach 2,4% in 2019. In the medium term, real GDP is

expected to grow by 1.5% on average.

► Until 2018, Greek GDP is expected to recoup c. 13% of the loss inflicted during

the crisis. Nominal GDP is expected to reach €214.8 bn in 2023, recouping a significant portion of the loss inflicted during the crisis (60%).

► Taking into account IMF projections until 2023 and a stable growth in nominal GDP after 2023 equivalent to the 2023 levels, GDP is expected to reach 2008

levels in 2027.

► Inflation in the medium term is expected to be in the region of 1.8%, which is close to the 2% target inflation for the Eurozone.

► Unemployment is expected to ease in the medium term, with unemployment rate expected to decline from 19.8% in 2018 to 14.1% in 2023.

► General Government debt as % of GDP is expected to be on a downward trend until 2023, reaching 151.1%.

GDP Growth General Government Debt



Inflation

-28.0%

23.3%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

2018 2019 2020 2021 2022 2023


Oct 2018: 1.1%


January 2019

2The Greek RES sector


January 2019

An attractive sector with significant room for growth and excellent resources

2 The Greek RES sector

Natural resources

Large surface areas with

wind speed between 4m/s -

10m/s

Excellent wind and solar potential

Source: Global Energy Network Institute

Solar PVs with irradiation

between 3.8 –5.5KWh/m2/da

y

► In terms of RES, Greece offers an excellent wind and solar potential.

► Ambitious and regularly reaffirmed targets for RES development: the Greek

electricity TSO forecasts c. 4.7GW of new RES until 2027.

► The RES sector recently switched from a FiT scheme to a FiP scheme via

auctions that fosters rationalization of tariffs and market stability.

► 2.6GW of new wind and solar tenders to come in the next 3 years (have already

started in July 2018).

► RES transactions have resumed in the recent years, following a period of

subdued activity.

► Financing for RES projects mainly provided by Greek systemic banks and

multilaterals; foreign commercial banks still absent from market.

Installed capacity Jun-18: 2017 continued the trend of 2016, which proved to be second best year for wind power installations after 2011, with deployment of new

121MW capacity unitl Sep 2017.

► In 2018, the Greek wind power sector comprised of ten major market players

operating wind parks of c. 2,7GW of installed capacity and a considerable pipeline of projects.

► Greece’s top five wind energy groups are: Τerna Εnergy (536MW), EltechAnemos (286 MW), Iberdrola Rokas (251MW), EDF EN (238MW) and Enel

Green Power (201MW).

► The solar power sector covered nearly 7% of the country's electricity needs with

a total installed capacity of 2,229MW (2,094MW interconnected system, 135.89MW NIIs), bringing Greece to one of the first places worldwide in terms

of the contribution of PV to total electricity demand.

3405

22502770

67

4650

2200

250

7500

350

Hydro PV* CSP Wind Biomass / Biogas

Aug-18 2020 target

RES installed capacity (MW)

Source: LAGIE, Aug 2018

* EU targets for solar do not take into account roof solar, thus roof solar capacity is not included in PV category

Includes

small Hydro

of 234MWinstalled

capacity with

a 2020 target

of 350MW


January 2019

Recent significant developments in the Greek RES sector

2 The Greek RES sector

Recent market developments

► Law 4414/2016 introduced Feed-in Premiums (FIPs), which in most cases, replaced the Feed-in-Tariff (FiT).

► All wind farms (with the exception of wind farms with capacity <3MW and demonstration projects) entering commercial or trial operation after Jan-16 in the I/C system are

required to participate in the wholesale energy market and paid as per market plus a

variable FiP (difference between RES market price and set price or Reference Tariff

(RT)).

► From 2018 onwards, RTs are set through an auctioning process.

► Wind farms entering into commercial or trial operation in the non I/C islands after Jan-16

continue to access a FiT-based scheme (compensated through RTs), provided that such islands remain non I/C or do not have a fully operational daily electricity market.

► New FiP and FiT contracts for wind farms will cover a 20 year period

► The first two tender auctions for renewables successfully took place in July and

December 2018 respectively.

► The joint auctions for 400 MW of wind projects over 50 MW and solar over 20 MW,

originally proclaimed to take place by the end of 2018, are shifted to 2019.

Recent policy developments

Source: Norton Rose, EBRD, HWEA, other public sources

Auction results

Financing

► Dec-18: Eurobank Ergasias and Alpha Bank are refinancing a 162 MW portfolio (4 wind projects, 127MW and 7 solar projects, 35MW) owned by Total Eren for €200mn.

► Oct-18: EBRD is financing a 44MW portfolio (2 operational wind farms, 38MW and another under construction, 6MW) owned by Terna Energy for €18 mn.

► Jul-18: EIB and Alpha Bank financed the construction of two Terna Energy wind farms (44 MW ), in northern Greece (total loan amount: €48mn.).

► Jul-18: Alpha Bank acts as MLA for the financing of Total Eren’s wind park in Trikorfoin Evia island, with a capacity of 19.2MW (total loan amount: €30mn.).

► Dec-17: EIB provided an €85mn. loan to PPC Renewables to support both the repowering of existing and the construction of new wind and hydro plants.

Transactions / Investments

► Sep-18: Nostira Energy and Intrakat signed an agreement to set-up a JV for co-developing hospitality and RES projects

► Sep-18: Euroenergy sold a portfolio of 9 wind farms (total generating capacity of 181MW) to Fortress for c. €300mn

► Apr-18: EuroEnergy completed the disposal (valued at €240mn) of 57 fully operational PV projects (total installed capacity of 56.7MW ) to SUMEC Clean Energy International.

► Nov-17: Shenhua Group acquired a 75% stake in the share capital of 4 wind farms (under construction / in operation) from Copelouzos Group.

Technology Category

December 2018 Successful BidsCombined Capacity

MW

Min price€/MWh

Max price€/MWh

Avg price€/MWh

Wind 3 MW to 50 MW 61.94 55.00 65.37 58.58

Solar0.5 MW to 1 MW 85.99 63.0 68.99 66.66

1 MW to 20 MW* 159.65 - - -

Technology Category

July 2018 Successful BidsCombined Capacity

MW

Min price€/MWh

Max price€/MWh

Avg price€/MWh

Wind 3 MW to 50 MW 170.9 68.2 71.9 69.5

Solar0.5 MW to 1 MW 53.5 75.9 80.0 79.0

1 MW to 20 MW 52.9 63.0 71.0 63.8

*Solar projects with capacity from 1 MW to 20 MW (Category II) in December auction was considered invalid, as it failed to satisfy the required level of competition.


January 2019

3Infrastructure investment opportunities in Greece


January 2019

3 Infrastructure investment opportunities in Greece

Northern Road Axis of

Crete

The project consists of the two sections which will run along the northern cost of the island, linking

the cities of Chania, Rethymno, Heraklion and Agios Nikolaos.

The two projects are being procured as:

a 30-year availability-based design, construct, finance, operate and maintain PPP contract

for the 26km Hersonissos to Neapolis section, which also includes an option for the

maintenance and operation of the adjacent 14km Neapolis to Agios Nikolaos section

whose construction is expected to be delivered under a public procurement contract.

a 25-year concession contract for the 140km Chania–Heraklion section.

EoIs have been received from international and local contractors and infra funds, inc. Shikun & Binui

from Israel.

1 Investment

PPP portion: €1.1bn.

Concession portion:

€290mn.

Athens International

Airport

The Greek State’s privatization fund, Hellenic Republic Asset Development Fund (HRADF), is

contemplating the sale of its 30% stake in Athens International Airport (AIA).

Process is expected to be initiated in Q1 2019.

The HRADF accepted in September 2018 a €1.115bn. offer, including VAT, from AIA in exchange for

a 20-year extension to the concession agreement until 2046.

AIA's other shareholders include PSP Investments (40% - Canada), Greek state (25%) and

Copelouzos Group (5% - Greece).

2 Key figures (2017)

Pax: €21.74mn.

Revenues: €454.9mn.

EBITDA: €284.5mn.

Hellinikon Integrated

Resort Casino (IRC)

30 year license for the design, construction, operation and financing of an integrated resort casino,

consisting of a casino development and accompanied by hospitality, retail, leisure, and MICE

facilities.

A greenfield project forming part of the Hellinikon project, one of the largest RE developments to be

constructed in Greece.

Interest has been expressed by 5 international strategic investors and 2 funds

RfP expected to be launched in January 2019.

3 Investment

>€500mn.


January 2019

3 Infrastructure investment opportunities in Greece

10 ports

HRADF’s portfolio of ports includes the ports of Volos, Rafina, Igoumenitsa, Patras, Alexandroupolis, Heraklion, Elefsina, Lavrion, Corfu and

Kavala.

HRADF holds 100% of the shares in the aforementioned port companies, which have the right to operate the respective ports until 2042.

Privatization of the above ports is expected to start in 2019.

4

Schools PPP project

(Chania and Rhodes)

The municipality of Chania in Crete has launched the tender for a school PPP project, comprising the

design, build, finance, maintenance and operation of eight schools, as well as the redevelopment and

upgrade of the Peace and Friendship park in Chania, for 27 years.

Interested parties are invited to submit expressions of interest by 20 February 2019.

The Rhodes schools PPP project entails the design, build, finance, maintenance and operation of 13

schools in Rhodes island, for 27 years.

The pre-qualification tender is expected in early 2019.

5 Investment

Chania Schools PPP project:

€41mn.

Rhodes Schools PPP

project: €42mn.

Integrated Waste

Management System

of Rhodes Island

through PPP

The project entails the design, build, financing, maintenance and operation of the Integrated Waste

Management System of Rhodes Island through a PPP scheme with a duration of 27 years.

Currently, the awarding authority seeks to appoint advisors.

6 Investment

€44mn.


January 2019

4Appendix


January 2019

4 Appendix

► In preparing this presentation (“Presentation”), we have used information from public sources or proprietary databases. No responsibility is assumed for information furnished by others, and such information is believed to be reliable. EY has relied on such information pursuant to a limited survey and does

not in any case represent or warrant that such data is adequate, accurate or complete.

► Our work does not intend to provide assurance on the achievability of the projections or on the assumptions underlying such statements. There are

usually differences between projected and actual results because events and circumstances frequently do not occur as expected and those differences, if

any, may be material.

► This Presentation should be viewed as a whole document.

Documents

Overview of RES and Infrastructure sectors in Greece of res and .pdfOverview of RES and Infrastructure sectors in Greece: | Page 5 of 13 January 2019 1 Macroeconomic Overview 344 335