China Development Bank provides a €130 million EUR loan for the Piraeus Container Terminal 3 Expansion Project (Linked to Record ID#90703 and #90730)

Project narrative

In December 2015, China Development Bank (CDB) provided a €130 million EUR loan to Piraeus Container Terminal S.A. (PCT) — a Greece-incorporated special purpose vehicle (SPV) and a wholly owned subsidiary of COSCO Pacific Limited — for the Piraeus Container Terminal 3 Expansion Project. This line of credit loan carried an interest rate of 3-month Euribor plus an unknown margin, a maturity period of 15 years, a grace period of five years, and a drawdown period of five years. The loan's repayment period, to be paid in semi-annual installments, began in 2020 and would end in 2030. The loan was secured by a potential commitment of the PCT's cash reserves, its mechanical equipment (which had a total accounting value of €50,240,340.75 EUR and a depreciable value of €43,549,278.57 as of December 31, 2015), and a pledge of the share capital in PCT held by its parent company, COSCO Pacific Limited. The loan also carried an unspecified management fee. As of the end of the drawdown period, December 31, 2020, only €105 million EUR of the available €130 million EUR was disbursed. In 2018, PCT and CDB renegotiated the terms of the loan. As a result, the mechanical equipment and shares held by COSCO Pacific were dropped as collateral, the management fee was abolished, and the interest rate margin was lowered by 0.4%. This loan restructuring is captured via Record ID#90703. The proceeds of the CDB loan to Piraeus Container Terminal S.A. were used to upgrade Container Terminal No. 2 and complete the construction of Container Terminal No. 3 at the Piraeus Container Port, raising the capacity of the port from to 3.7 million TEUs to 6.2 million TEUs and the number of berths for container ships with over 10,000 containers from 3 to 5. CDB had previously provided a €215 million EUR loan to PCT for work at Pier II and some work at Pier III, as captured via Record ID#90730. This project, among other things, sought to construct the west pier at Pier III, an oil pier and a petroleum products pier at the southern part of Pier III, loading and unloading facilities, a storage facility, administrative facility, and accompanying facilities as well upgrade Pier II's port equipment. The expansion at the east side of Container Terminal No. 3 included an 18.5-meter-deep berth and a 19.5-meter-deep berth for two large container ships. The work also included a quay wall with a length of 876 meters and 40 reinforced concrete caissons. Th project had an estimated cost of €230 million EUR. PCT was established to manage Container Terminals No. 2 and No. 3 at the Port of Piraeus that COSCO Shipping took control over on October 1, 2010, after striking the concession agreement in 2008. COSCO Pacific is leasing and operating the Piraeus Port container terminals for 30 years under a build-operate-transfer (BOT) lease agreement with the Piraeus Port Authority S.A. (PPA), with an extendable five-year term. Piraeus Port is the largest port in Greece and for the Balkans and Black Sea countries. The project was expected to create 200 new jobs during construction and 800 permanent ones upon completion. The expansion was expected to benefit the greater China-Europe Land-Sea Express Line. COSCO's involvement at Piraeus Port, including this project, has been hailed as the ‘flagship project’ of the Sino-Greek Construction of the Belt and Road Initiative (BRI). On November 27, 2014, PCT and PPA signed an agreement to expand the capacity of Container Terminal No. 2 and Container Terminal No. 3 of the Port of Piraeus in November 2014. Then, in December 2014, the Hellenic Parliament approved COSCO SHIPPING's €230 million EUR investment to expand Container Terminal No. 3. Greece's approval meant that COSCO Pacific, which previously held only the rights to operate the west side of Container Terminal No. 3, now had access to the east side of the terminal for the expansion. Tractebel Engineering was appointed to conduct a design study for the quay walls, the apron of the quay for container handling, the drainage system, and the mooring equipment accessories to berth the vessels at Pier II and III. COSCO awarded a contract to DomosFeron Consulting Engineers for project implementation. A joint venture between KGR GROUP (Klearchos G. Routsis S.A.) and Tekal S.A. awarded a contract to Gleitbau GmbH to provide the equipment and supervision for the slipform operation, including the geometry control, for the caissons. The project's groundbreaking ceremony, which was attended by Prime Minister of Greece Antonis Samaras, was held on January 22, 2015. Civil construction was expected to last four years. This project was completed in 2018, but its precise completion date is unknown.