Piraeus Port receives 140-million-euro loan
Loan from European Investment Bank to support the expansion of Greek port, part-owned by Cosco, is signed during Xi Jinping's visit
19 Nov 2019 | Michael Marray

Chinese President Xi Jinping stopped off in Greece for a three-day state visit on his way to the BRICS Summit in Brazil. During the visit he accompanied Greek Prime Minister Prime Minister Kyriakos Mitsotakis on a visit to Piraeus Port, one of the most prominent Belt & Road Initiative projects within the European Union. 

Xi also discussed developing bilateral relations within the context of the two countries' comprehensive strategic partnership, during talks with both President Prokopis Pavlopoulos and Prime Minister Mitsotakis.

In 2009, a unit of China Ocean Shipping Company (Cosco) began managing the Piraeus Port container terminals. The Greek debt crisis then happened, and Greece was pressured to privatize some assets by the so-called troika (European Commission, International Monetary Fund and the European Central Bank), which was monitoring the economy as a precondition for new loans.

As part of a privatization programme, in 2016, Cosco acquired a 51% stake in the port, and has recently delivered a master plan for a major expansion programme.  

During Xi's visit, the European Investment Bank (EIB) formally agreed to provide 140 million euros (US$155 million) to support the expansion and upgrading of the Port of Piraeus. This loan will support the implementation of part of the overall investment plan costing more than 600 million euros.

The 20-year loan was signed in Athens in the presence of President Xi; Prime Minister Mitsotakis; Xu Lirong, Chairman of Cosco Shipping Corporation; and Chairman of Piraeus Port Authority Yu Zenggang; by Andrew McDowell, EIB Vice President; and Athanasios Liagkos, board member of the Piraeus Port Authority.

The first 100-million-euro tranche was signed, and the remainder agreed as project construction progresses. The EIB loan is guaranteed by the Export Import Bank of China (CEXIM). The guarantee facility contract between PPA and CEXIM was also signed in the presence of CEXIM Chairwoman Hu Xiaolian and Thanos Liagkos from PPA.

In spite of the involvement of the EIB, the 2016 sale of Piraeus to Cosco is now viewed as highly controversial in Brussels, giving China control over one of the top ten European ports. In addition to the expansion of Piraeus itself, China also has plans to improve road infrastructure in southern Europe, in order to funnel more freight volume though Piraeus.

The control exerted over Greece by the troika during the Eurozone crisis caused a lot of hostility among the general populaton, and the Greek government is pursuing a closer relationship with China, rather than being over-reliant on the EU. 

This year, Greece signed up as a member of the Cooperation between China and Central and Eastern European Countries (the 17+1).

China is now showing interest in acquiring another EU port, after the Portuguese government announced a public tender for the Vasco da Gama Terminal at the port of Sines.

Local media reports that Shanghai International Port Group (SIPG) is expected to be one of the bidders on the project.

In May, Lu Hau, the Chinese Minister of Natural Resources, visited the port of Sines to be briefed on the details of the project, which will be structured as a 50-year concession, with financing to be provided by the winning bidder.

The new terminal will have an annual capacity of 3.5 million TEU (twenty-foot-equivalent units), and the sucessful bidder is expected to invest an estimated 642 million euros.

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