The successful completion of a bond loan issue by Public Power Corporation is considered to be a vote of confidence in the PPC's business plan and the Greek economy in general. In comments made to the Athens-Macedonian News Agency (ANA), George Stassis, chairman and CEO in PPC, said that the success - beyond the oversubscription and the low level of the interest rate - is mostly based on the unprecedented and high rate of participation by foreign investors (around 70 pct), while 50 pct of the issue was covered by high prestige and global investors.
The sustainability-linked bond's return is related with achieving specific environmental targets. More specifically, PPC is committed to reducing CO2 emissions by 40 pct in 2022, compared with 2019, and to pay higher interest rates to investors if it fails. PPC's business plan envisages a reduction of CO2 emissions by 62 pct in the period 2019-2023 (from 19.7 million tons to 7.5 million), which will be largely achieved with the retirement of all lignite units except Ptolemaida 5, which is expected to begin operating in 2022 and be transformed into a greener technology in 2028.
PPC raised 650 million euros from the five-year bond issue at an interest rate of 3.875 pct. Bids were more than 6.0 billion euros, or six times the initial asked sum of 500 million. The proceeds of the bond will be used to repay existing loans, investments and general purposes. PPC's previous bid to raise funds in capital markets was in 2014 when it raised 700 million euros, of which 500 million euros through a five-year bond with an interest rate of 5.5 pct.