Business Growth Fund

The Hellenic Development Bank (HDB) and the Cooperative Bank of Chania have entered into an agreement for the Portfolio Fund program entitled “Business Growth Fund”, which aims to support and promote the business activity of Small and Medium-sized Enterprises (hereinafter “SMEs”). The purpose is to implement investments in green transition projects, address the impacts of the decade-long economic crisis and the Covid-19 pandemic—particularly the lack of access to funding sources—and improve financing terms through the development of three new financial instruments.

Within the framework of the Business Growth Fund Portfolio, the following individual financial tools are available:

a) Green Co-Financing Loans,

b) Digitalization Co-Financing Loans, and

c) Liquidity Co-Financing Loans.

The programs Digitalization Co-Financing Loans and Liquidity Co-Financing Loans fall under the De Minimis Regulation (EU) No 1407/2013, as currently in force.

The Green Co-Financing Loans program operates under different state aid rules depending on the sub-program:

Sub-program 1: Aid must comply with Article 17 of the General Block Exemption Regulation (GBER) – Investment aid to SMEs.

Sub-program 2: Aid must comply with Article 39 of the GBER – Investment aid for energy efficiency measures.
Additionally, following the publication in the EU Official Journal of the amendment to the GBER (based on Commission Communication C(2023) 1712 final), and specifically the enactment of Article 38b, this sub-program can also finance Energy Service Companies (ESCOs) for implementing energy efficiency investments on behalf of third parties.

Sub-program 3: Aid must comply with Article 41 of the GBER – Investment aid for the promotion of energy from renewable sources.

Recipients of funding must be businesses that cumulatively meet the following criteria:

1. They are Very Small, Small, or Medium-sized Enterprises (SMEs).
2. They do not engage in Non-Eligible Activities.
3. They operate in any eligible NACE code (ΚΑΔ). In cases where a business operates in more than one sector, the main activity must be eligible. The main activity—according to the terms set in the Loan Agreement between the Greek State and the EIB—is defined as the activity (NACE code) generating the highest revenue (before interest, taxes, and depreciation).

4. They maintain an establishment and legally operate in Greece, having been established by the time of submitting the financing application to the Bank.
5. They are not considered “problematic” (within the meaning of Article 1, paragraph 4, and point 18 of Article 2 of Regulation 651/2014, as currently in force).
6. They are deemed creditworthy according to the Bank’s applicable credit policy and internal procedures.

1. They have not been subject to collective insolvency proceedings, nor do they meet the conditions under applicable national legislation to be subject to such proceedings upon creditors’ request.
2. They do not have overdue debts exceeding 90 days as of the financing application date (this is verified through bank clearance certificates, account statements, or web banking printouts showing the delay period).

9. No grounds for exclusion under Article 40 of Law 4488/17 (Government Gazette A 137/139/17), as applicable.
10. There is no pending order for the recovery of previous unlawful and incompatible state aid based on an EU or CJEU decision.
11. The business has not received rescue or restructuring aid; or if it has received rescue aid, the loan has been fully repaid and the guarantee agreement terminated; or if it has received restructuring aid, the restructuring has been completed (this does not apply to the “Liquidity Co-Financing Loans” program).
12. If they have participated in programs of the Hellenic Development Bank (formerly ETAAΝ), which have been completed or are still active, the businesses must not have shown adverse payment behavior regarding their debts (such as loan termination or overdue debts exceeding ninety (90) days). In cases where adverse behavior was shown (loan termination), the debts must have been fully repaid before submitting the financing application. In the case of guarantee programs, no guarantee debt amount should have been paid by the HDB, or if the debt has been confirmed by the competent tax authority (D.O.Y.), it must be included in an active repayment arrangement at the time of submitting the financing application.
13. They must not have been excluded by an exclusion decision from the European Investment Bank (EIB) at the time of submitting the financing request to the Bank or at the time of signing the Final Recipient Agreement, according to the EIB Exclusion Policy.
14. They operate in any sector except those listed under Code 2 of the NACE Classification (Statistical Classification of Economic Activities in the European Community), as defined in the Loan Agreement of the Greek State and its accompanying letter, and as specified in the Fund’s Implementation Guide (this applies only to the Digitalization Co-Financing Loans program).
15. They have not started the investment project (as defined in Article 2, point 23 of the GBER) before submitting a written financing application to the HDB, to satisfy the incentive nature of the aid under Article 6 of the GBER (this applies only to the Green Co-Financing Loans program).

1. 1. Businesses excluded under Regulation (EU) No 1407/2013, namely:
      • Aid to enterprises active in the fisheries and aquaculture sectors, covered by Council Regulation (EC) No 104/2000.
   2. Aid granted to enterprises operating in the primary production of agricultural products.
   3. Aid granted in the processing and marketing of agricultural products, in the following cases:
      • When the aid amount is determined based on the price or quantity of these products purchased from primary producers or marketed by the respective enterprises.
      • When the aid is conditional upon partial or full transfer to primary producers.
   4. Aid for activities related to exports to third countries or to EU member states, especially aid directly linked to exported quantities, the creation and operation of a distribution network, or other current expenses related to export activities.
   5. Aid conditioned on the use of domestic goods instead of imported ones.
   6. Legal entities governed by public law, local government organizations of first and second degree, municipal and public enterprises, and public organizations.
   7. Legal entities or associations of persons or non-profit companies (such as societies, clubs, groups, NGOs, etc.).
   8. Companies listed on the stock exchange.
   9. Offshore companies or holding companies in other companies, as well as their branches in Greece.
   10. Companies in the financial sector.
   11. Activities excluded by the European Investment Bank’s (EIB) Exclusion Policy, according to the list of Non-Eligible Activity Codes (NACE codes) as included in the Fund’s Implementation Guide.
   12. Additionally, businesses involved in the following activities are not eligible:
   13. Activities aimed at the production or trade of weapons and ammunition, explosives, equipment or infrastructure specifically designed for military use, as well as equipment or infrastructure that result in the restriction of individual rights and human freedoms (e.g., prisons, detention centers of any kind) or activities that violate human rights; activities causing environmental impacts that are not substantially mitigated and/or compensated (including projects in protected areas, critical habitats, and cultural heritage sites).
   14. Activities considered ethically or morally controversial, such as human cloning research and animal testing.

   III. Health Technology activities related to human cloning for research or therapeutic purposes and Genetically Modified Organisms/Foods.

   1. Activities considered illegal and prohibited by national law.
   2. IT activities related to online gambling, casinos, and illegal activities (pornography, illegal hacking of electronic networks, illegal misappropriation of electronic data).
   3. Decommissioning or construction of nuclear power plants.

   VII. Businesses where more than 10% of annual revenue comes from:
   a) activities aimed at the production or facilitation of gambling and related equipment/betting, and
   b) activities aimed at the production, processing, manufacturing, or specialized distribution of tobacco, as well as activities facilitating tobacco use (e.g., “smoking rooms”).