Budget – How will the Hellenic Republic Asset Development Fund achieve revenues of 2.2 billion euros in 2022

With Egnatia Highway and DEPA Infrastructure leading the revenues for 2022, the HRADF revenues are estimated to reach 2.204 billion euros. As foreseen in next year’s budget, the two tenders that have emerged as the preferred investor will put money in the coffers during the 3rd quarter of 2022.

It is noted that revenues for 2021 will close at 638.3 million euros, compared to 1.79 billion euros that were budgeted last year. However, the lost ground that was brought bout by the “brake” of the pandemic to the privatization program is being covered at a slow pace.

In particular, the budget envisages cash revenues of € 2,204 billion from privatizations, of which € 1.972 billion will come from tenders for which binding offers have been submitted, with an expected first disbursement in 2022. It is recalled that last year’s budget for 2021 foresaw revenues of 1.79 billion euros from privatizations, which for 2022 amounted to 1.42 billion euros.

Also, for the new year, 178.7 million euros will come from the payment of installments of completed transactions of previous years, while another 52.6 million euros are estimated revenues from project tenders that are expected to be completed in 2021.

Performance in 2021

In 2021, 300 million euros entered the fund from the first installment of the one-time price of 915 million euros for the sale of 100% of the shares of Hellinikon SA, marking the beginning of the development of the area as the largest urban regeneration in Europe.

Also, the consortium GEK TERNA – EGIS was declared the preferred investor for the 35-year concession of Egnatia Highway with a binding offer of 1.49 billion euros. In addition to this amount, the total expected annual revenue that the Greek State will receive from the operation of the highway during the concession, is estimated to exceed 850 million euros, according to the financial model of the contractor.

ITALGAS was also declared a preferred investor for DEPA Infrastructure, offering a price of 476 million euros. In addition, the sale contract for North Afandou Rhodes was signed, for 26.9 million euros, while the tenders for four properties were completed. Finally, the Fund was given the share of the auction for the allocation of the frequency spectrum for the development of 5th generation networks.

In terms of tender procedures, the ports had the first say, with Alexandroupolis, Kavala, Igoumenitsa and Heraklion in progress, as well as the marina of Kalamaria. Also, the tender for the property in Gournes, Heraklion, the underground gas storage of South Kavala and DEPA Commerce are in progress.

In terms of fixed asset sales, revenue is estimated at € 30 million, down € 307 million from the target of the Medium Term Fiscal Strategy Framework 2022-2025. This reduction is due to the fact that the collection of the price from the utilization of the area of ​​the former Hellinikon International Airport, which took place in July 2021, was recognized as a sale of shares.

The first decade of HRADF

From the start of operation of the Fund in 2011 until 2021, 52 projects were implemented with the submission of binding bids with a total value of almost 11.3 billion. Revenues (on a cash basis) were collected from integrated transactions with a total value of 7.6 billion euros.

In fact, as noted in the text of the budget, the difference of 3.7 billion. euro lies on the one hand, in a planned installment distribution for projects in which the financial closure has already taken place and on the other hand in projects for which there is a binding offer and the financial closure is expected next year. In addition, on top of the total price paid, investors, depending on the type of transaction and if the nature of the asset allows it, commit to a minimum amount of investment and development programs.

An important part of the HRADF portfolio is real estate. After 2016, as noted in the text of the budget, after 2016 remained about 91 properties or property clusters. Of these, 48 have already been utilized, while another 20 are in the mature phase of utilization.