Subsidies I (Development Law)

Updated: 17.01.2019

Author: Georgios Maroulis

The Development Law that came into force in July 2016, foresees support in form of a subsidy for CHP plants, small-scale hydro-power plants, and self-production using other RES (art.9 par.7 and par.8 Law No.4399/2016). More specifically, subsidies, leasing subsidies, and subsidies for the creation of new jobs are provided, while they can be substituted with other support mechanisms, i.e. tax regulation mechanisms, under the Development Law (s. “Tax regulation mechanism”)

Eligible technologies

CHP, small-scale hydro-power and other RES (not defined) are eligible (art.9 par. 7 and 8 Law No.4399/2016). Hybrid RES plants on non-interconnected islands (up to 5MW) are also supported (art.9 par.7 No.4399/2016).

Wind energy

Only for self-production (art.9 par.8 Law No.4399/2016).

Solar energy

Only for self-production (art.9 par.8 Law No.4399/2016).

Geothermal energy

Only for self-production (art.9 par.8 Law No.4399/2016).

Biogas

Only for self-production (art.9 par.8 Law No.4399/2016).

Hydro-power

Small-scale hydro-power is eligible (art.9 par. 7 Law No. 4399/2016).

Biomass

New CHP plants are eligible (art.9 par. 7 Law No. 4399/2016).

Amount

To be eligible for support, minimum investment should amount to (art.5 par.3 Law No. 4399/2016): 

  • Large enterprises: € 500,000 
  • Medium enterprises: € 250,000 
  • Small enterprises: € 150,000 
  • Very small enterprises: € 100,000 
  • Social cooperatives/ cooperatives: € 50,000
RES for self-consumption can make up to 15% of eligible regional support. Regional support maximum is stipulated in the Regional Support Map (C (2014) 2642/7.5.2014), which is approved by the European Commission and is available at: http://ec.europa.eu/competition/state_aid/cases/252063/252063_1547272_57_2.pdf As far as a CHP plant is concerned, eligible costs include (1) additional investments in the installation of an equipment that is needed for a CHP plant to function as a high efficient CHP, as compared to a conventional power plant of the same capacity, or (2) additional investment cost for upgrading the performance of the CHP plant (art.7 par. 7 Law No. 4399/2016). Eligible for support are also investment plans for small-scale hydro-power. In addition, support for RES used for self-consumption only is also foreseen (art.7 par.8 Law No.4399/2016). The Development Law alternatively offers the following types of support (art. 10 Law No. 4399/2016): 1. Subsidies 2. Leasing subsidies 3. Subsidies for the creation of new jobs Eligible for leasing subsidies and subsidies for the creation of new jobs are general entrepreneurship and supporting innovation for SMEs (art.38 and art. 48 Law No.4399/2016). New independent SMEs are eligible for all three categories of support: subsidies, leasing subsidies and subsidies for the creation of new jobs (art.43 Law No.4399/2016). RES projects are eligible for support, subject to the following limitations (art. 11 par.3 subpar.2h and 2z Law No. 4399/2016): For CHP (art. 11 par.3 subpar. 2z Law No. 4399/2016): 
  • 45% of the eligible expenditure for large enterprises 
  • 55% of the eligible expenditure for medium enterprises 
  • 65%of the eligible expenditure for small enterprises
For small hydro and hybrid plants (art. 11 par.3 subpar. 2h Law No. 4399/2016) there are two options: Option 1 If extra investment costs necessary to promote the production of energy from renewable sources are eligible costs under art. 41 par. 6 cases a and b of the EU Regulation 651/2014: 
  • 45% of the eligible expenditure for large enterprises 
  • 55% of the eligible expenditure for medium enterprises 
  • 65% of the eligible expenditure for small enterprises.
Option 2 If extra investment costs necessary to promote the production of energy from renewable sources are eligible costs under art. 41 par. 6 case c of the EU Regulation 651/2014: 
  • 30% of the eligible expenditure for large enterprises 
  • 40% of the eligible expenditure for medium enterprises 
  • 50% of the eligible expenditure for small enterprises.
Further support between 5%-15% is foreseen, if the investment takes place in certain regions specified in the Regional Support Map (C (2014) 2642/7.5.2014), which is approved by the European Commission.

Addressees

Entitled party. All enterprises based in Greece or having a branch in Greece at the moment of the entry into force of the Development Law are eligible for this support scheme as long as they fall under the following categories:

1) private enterprises

2) commercial companies

3) cooperatives and

4) social cooperatives (art. 6 Law No. 4399/2016)

Obligated party. The Ministry of Economy, Development and Tourism (YPOIAN) (art.14 par.7 Law No. 4399/2016)

Procedure

Process flow

  • Proposal Submission: Interested parties submit their proposal to the Ministry of Economy, Development and Tourism or to the respective Administrative Region Authorities once a related call is issued. Interested parties are also obliged to pay a deposit fee that varies between € 300 - € 5,000 and should not exceed € 50,000 for major investment plans (art.13 Law No.4399/2016) 
  • Primary Assessment: All investment plans are assessed according to the predefined criteria. This primary assessment examines the completeness and legitimacy of the proposal (art. 14A Law No. 4399/2016) 
  • Second Assessment: The second stage of the assessment takes specific economic criteria into consideration. There are two kinds of Assessment: Comparative and Direct. In relation to the Comparative Assessment, a ranking is made and those investment plans that have received the highest scores receive the subsidy. In relation to Direct Assessment, the proposal is examined on a “case-to case” basis according to specific criteria. The process is completed within fifty (50) days. Further inquiries for any of the proposals should be submitted within ten (10) days (art.14B law No.4399/2016).
  • Investment Plan control: Competent authorities will control the realisation process of the investment plan. This control will be carried out once 50% of the investment plan (in economic or physical terms) is completed (art. 16 Law 4399/2016)
  • Support approval: The plant operator receives the support as a lump sum or in instalments, depending on the support category (art.20 Law No.4399/2016). Subsidy is validated after 50% of the investment plan is completed. The rest of the sum is granted once the investment is completed. Leasing subsidy is granted once it is validated that the related equipment is leased. Subsidy for the creation of new jobs is granted once the investment plan for the creation of new jobs is validated. The subsidy is paid off twice a year.

Competent authority

Ministry of Economy, Development and Tourism (art.14 par.7 Law No. 4399/2016) is responsible for publishing, evaluating and approving the support for successful applicants. In addition, the Ministry of Interior and the Administrative Regional Authorities are in cases in charge.

Distribution of costs

The support is offered by the state and more specifically the Ministry of Economy, Development and Tourism (art.14 par.7 Law No. 4399/2016). The budget varies per each call per investment category.

State

Own contribution amounts to 25% of total investment cost (art.5 par.1 Law No.4399/2016)

Greece

Basic information on legal sources