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Good practice examples > Greece > Public-Private Partnership (PPP) Waste Projects
Public-Private Partnership (PPP) Waste Projects
November 20, 2014
Name of GP initiative

Public-Private Partnership (PPP) Waste Projects

Number of GP initiative

GR5

Region/country

Greece

Author/Email Elena Georgopoulou / elenag@noa.gr
Institution National Observatory of Athens (NOA)
Year of implementation:

2010

Time horizon of initiative/map/etc.:

Not defined

General description:

Waste prevention is the first step in the waste management hierarchy, followed by re-use, recycling, energy recovery and the safe final disposal of any remaining waste. Reducing the amount of biodegradable materials (organics, paper etc.) disposed of in landfills leads to a reduction in emissions of methane. In addition, GHG emissions generated by conventional fuels can be avoided through energy recovery from waste, while waste prevention has indirect benefits in terms of climate change mitigation due to the reduction of energy and materials utilised.

In this framework, a key issue is the construction and operation of waste treatment facilities in conformity with the relevant regional waste management plans, which are able to meet the quantitative targets for waste minimisation. Although not introduced primarily for the purposes of GHG mitigation, public-private partnerships (PPP) are an essential tool in developing waste management facilities in Greece, especially in the context of the currently limited availability of public funds. As far as the construction costs of these facilities is concerned, the public contribution is assured by the National Strategic Reference Framework (NSRF) and represents up to 40 percent of the capital expenditure (capex). The remaining 60 percent is covered by the private sector. The PPP is responsible for operating the facility for a 25-year period.

Steps in creating the initiative/roadmap/strategy:

To promote PPP projects in Greece, a new legislative framework has been formulated. Law 3389/2005 is the main legal instrument for the development and implementation of PPP projects. In this framework, a specific secretariat has been created within the Ministry for Development to deal with the implementation of PPP projects.

For waste management projects, the government considers that a PPP has the advantage of effective risk allocation between the private and public sectors. The private sector has an additional interest in ensuring the quality of the infrastructure to be constructed, as it will be responsible for the operation of that infrastructure. Through the partnership, the public sector is able to overcome its main barrier, which is the coverage of initial capital costs. Thus, in 2010, the Greek Government decided to develop the majority of waste treatment facilities as PPP projects.

In this framework, the investment costs (capital expenditure) are partly covered by NSRF funding (about 40 percent), representing the public financial contribution, while the remaining costs are covered by private funding.

To date, tender procedures related to the construction of six waste treatment facilities have led to the selection of relevant consortia (construction work is about to start at five of these facilities), and tenders have been issued for eight additional facilities.

Targets and target determination:

The main target of all PPP waste projects is to promote environmentally sound waste management through cooperation between the public and private sectors. A PPP ensures better risk allocation between the public and private sectors, while at the same time mobilising additional financial resources. In terms of waste management, PPPs contribute to meeting the quantitative and qualitative targets for 2020 established in Directives 98/2008 and 99/31.

Success factors:

Success factors:

  • The use of NSRF funding can reduce private investment in a period of limited financial resources in the Greek economy.
  • The implementation of PPP schemes for the construction of waste management facilities covers a significant part of the capital costs through private funding, thus reducing the risks for the public authorities.
  • The significant lack of waste management infrastructure is a driving force for the development of relevant PPP projects.

Barriers:

  • The remaining risk surrounding investments in Greece affects the availability of private financial flows.
  • Procedures involving the NSRF are sometimes complicated and subject to long, bureaucratic procedures.
  • There is public scepticism surrounding (and often public opposition to) the siting of waste management facilities, especially when the private sector is involved.

Responsibility for application:

The Ministry for Development is responsible for the evaluation of PPP projects in cooperation with the Ministry for Environment, Energy and Climate Change (YPEKA) and the Ministry for the Interior with respect to waste management projects.

Implementation costs:

The YPEKA has estimated the average implementation costs for integrated waste management for the new NSRF programming period 2014–2020 at EUR 1.5 billion. In addition, approximately EUR 0.5 billion have been used during the current programming period 2007–2013. The public contribution for PPP projects for waste treatment facilities is around 50 percent of these financial resources.

Economic effects (GDP, employment):

The economic effects have not been analysed.

Others:

This document was developed in the framework of the LOCSEE project.

European Union SEE Regional Policy Network collaboration area (members only) Regional Policy Network