Global · Case study

Port of Piraeus, EIB Loan with Export-Import Bank of China Guarantee

Piraeus, Greece2019 to present

In November 2019, the European Investment Bank (EIB) announced EUR 140 million in backing for the Port of Piraeus expansion and modernization, with an initial EUR 100 million agreement signed in November 2019. The loan is guaranteed by the Export Import Bank of China (EIB, 2019).

The EIB loan, with a 20-year maturity structure, supports part of a total investment plan of more than EUR 600 million at the port. The transaction combined an EIB loan, a guarantee from the Export Import Bank of China, and the investment plan of Piraeus Port Authority S.A. (PPA), in which COSCO Shipping holds a majority share.

The Port of Piraeus case shows public bank lending supporting investment by a privately controlled port company in port infrastructure modernization (EIB, 2019). The EIB release describes the first EUR 100 million as the first tranche, with the remainder to be agreed as construction progresses; later tranches have not been verified. The borrower, PPA, operates the port under a concession from the Greek State. In 2002 the state granted PPA the exclusive right to use and profit from the port's land, buildings and facilities for 40 years (PPA, n.d.). This is the historical grant; current concession terms have not been checked.

New port infrastructure supported by the EIB loan included a new port logistics center, modern cruise passenger handling facility, expanded car shipping facilities, improved ship repair areas, and container terminal upgrades (EIB, 2019).

The transaction showed how a European public lender and a Chinese state policy bank can work together on port infrastructure, with the EIB providing a long-term loan and the Export Import Bank of China guaranteeing it.

Transferability

The Port of Piraeus financing model may be applicable to DMCs where port operators seek to attract major Asian shipping line investment while accessing European and multilateral development bank financing.

The transaction demonstrates how port authorities can structure multi stakeholder financing combining long term public bank lending, state bank loan guarantees, and private sector operational expertise to fund major modernization programs. EIB eligibility and terms do not transfer directly to DMC ports; the principles apply only where comparable lenders and guarantees are available.

Sources

All information used for this case study was based on publicly available resources.