Narrative
Full Description
Project narrative
In December 2016, Chinese state-owned electric utility State Grid Corporation of China (SGCC) signed an agreement to acquire a 24% ownership stake in Greece's national electric transmission operator, Independent Power Transmission Operator (IPTO) S.A. (also known as ADMIE S.A.). Then, on November 3, 2017, China Development Bank (CDB) and ADMIE signed a memorandum of cooperation with China Development Bank on the provision of a credit line to fund infrastructure projects, such as connecting the island of Crete to the Greek national grid. Then, on April 20, 2018, Bank of China (Luxembourg) S.A. (BOC Luxembourg) and the Industrial and Commercial Bank of China (ICBC) signed a €199 million EUR syndicated loan agreement with ADMIE S.A. This loan carried a maturity period of five years, a grace period of one year, and an interest set to an (unidentified) floating market rate plus a margin of 2.4%. Record ID#90539 captures ICBC's contribution to this syndicated loan and Record ID#92464 (this project) captures BOC Luxembourg's contribution. BOC Luxembourg served as the coordinator and organizer for this loan. No sovereign guarantee or collateral was provided for this loan. The loan facility proceeds were fully disbursed on April 30, 2018. The loan was described by the CEO of ADMIE as "a tangible example of the benefits arising from the presence of the State Grid Corporation of China as a strategic partner in the share capital of IPTO" and was expected to improve ADMIE's €1 billion EUR investment program and quicken the implementation of the Cyclades and Crete interconnection projects. Then, on March 4, 2020, BOC Luxembourg and ICBC refinanced €199 million EUR syndicated bond loan to ADMIE S.A. The interest rate on the remaining loan balance, €154.8 million EUR, was revised to 2.7% — a reduction of 30 basis points (the previous interest rate was 3%). For this refinancing, please see linked Record ID#90584. Then, on September 25, 2020, ADIMIE S.A. signed a €400 million EUR syndicated bond loan with BOC Luxembourg, National Bank of Greece S.A. (NBG), Piraeus Bank S.A, and Alpha Bank. This loan carried a maturity period of six years, an interest rate of 2.1% for the first three years and 2% for the last three years – surcharged of EURBIOR. The loan was disbursed on September 28, 2020. For BOC Luxembourg's participation in this syndicated loan, see linked Record ID#90585. NBG served as the syndicated Coordinator, Structuring Bank, and Mandated Lead Arranger. Piraeus Bank served as the Co-Arranger, Structuring Bank and Mandated Lead Arranger. Alpha Bank and BOC Luxembourg served as Mandated Lead Arrangers. The Athens Branch of BOC served as an appointing leading bank, likely in conjunction with BOC Luxembourg. The loan was divided into two tranches: a €310 million EUR tranche which the borrower would the use to refinance ADMIE's existing loan obligations, notably its April 20, 2018 €199 million EUR syndicated loan from ICBC and BOC Luxembourg and a €228.5 million EUR loan from Greek systemic banks; and a €90 million EUR tranche which the borrower would use for working capital purposes such as facilitating ADMIE's implementation of its investments, which, among other things, included the interconnection and modernization of the electricity network of various Greek islands and the mainland. The €310 million EUR tranche was reportedly a credit line. This €400 million EUR loan was the first instance of Chinese and Greek financial institutions collaborating within the Greek market.
Staff comments
1. Independent Power Transmission Operator S.A. is charged with managing and performing the activities and duties of owner and operator of the Hellenic Electricity Transmission System. More specifically, ADMIE's purpose is the operation, exploitation, maintenance and development of the Hellenic Electricity Transmission System so as to ensure that the supply of electricity in Greece is conducted in an adequate, safe, efficient and reliable manner (see "ADMIE"). 2. AidData has coded 3.0% as the interest rate for this loan because this was the old interest rate when BOC Luxembourg and ICBC refinanced the loan in March 2020, which reduced the interest to 2.7% (see pg.25 and pg.38 of "IPTO INTERIM CONDENSED FINANCIAL STATEMENTS for the period January 1st to June 30th 2020"). 3. Until the end of June 2017, the Independent Power Transmission Operator (IPTO) S.A. (also known as ADMIE S.A.) was a wholly owned subsidiary of majority Greek state-owned Public Power Corporation of Greece (PPC S.A.) (see "ADMIE"). After the transfer of 51.12% of the ADMIE Holding S.A. shares to DES ADMIE S.A. on July 24, 2017, IPTO S.A.'s majority owner at 51.07% of shares was the Government of Greece via DES ADMIE S.A directly controls (as above 24%) and indirectly through its participation in the ADMIE Holdings (see pg.42 of "ADMIE Holding Annual Report 2018"). The current shareholder structure of ADMIE S.A. is as follows: 51% by ADMIE HOLDINGS Inc., 25% by DES ADMIE S.A., 24% by Chinese state-owned State Grid Europe Limited (see slide 7 of "ADMIE Holding Corporate Presentation June 2021"). 4. The individual contributions of ICBC and BOC Luxembourg to this €199 million EUR are unknown. For the time being, AidData has estimated the contribution of the two banks by assuming that the two lenders contributed equal amounts (€99,500,000 EUR) to the loan syndicate.