The Greek infrastructure is getting a makeover. What will be changed?

EU funding & finance for Greece’s smart cities

Greece is the birthplace of democracy, diplomacy, Western philosophy and the concept of political science, among many other things that we benefit from on a daily basis. The ancient Greeks were, arguably, the smartest people that ever lived. So fast forward to 2022 and it’s encouraging to see that the move towards the smart city is gaining momentum in modern Greece in, it has to be said, circumstances that are far from ideal for breeding intelligent mobility deployments.

Greece was the first EU member state to have its Partnership Agreement approved in 2021, meaning that the Government was prepared with its priorities at the beginning of the EU Smart Cities Program.

The Greek Government launched Phase I of the Smart Cities program in October 2021 and invited the largest 17 municipalities to submit their strategic plans calling for project proposals for funding. Recently this was followed up with Phase II inviting municipalities with a population of up to 100,000 residents to submit proposals for digital transformation by the end of October 2022.

Seventeen municipalities were invited to submit their strategic plans under the Smart Cities program from the RRF (EU Recovery and Resilience Facility), with a total budget of €90 million. The program is aimed at the development of new infrastructure, digital platforms and IT systems, providing the opportunity to use technology and data to improve urban infrastructure and e-services. Among the activities of interest are transport, safety and the environment. The 17 eligible municipalities are:

Athens, Thessaloniki, Piraeus, Patra, Heraklion, Larissa, Volos, Peristeri, Rhodes, Ioannina, Chania, Acharnes, Nikaia-Agios Ioannis Rentis, Halkida, Kordelio-Evosmos, Kallithea and Trikala. Athens, having the largest population, is receiving the largest share of €20 million and Thessaloniki, having the second largest population, may receive in the order of €5-10 million.

For interest, Trikala has the reputation of being the first digital city in Greece and one of the world’s first smart cities. It has introduced digital infrastructure, such as driverless buses and a smart pedestrian system providing a station for receiving traffic and environmental data for all uses. Thessaloniki is planning a data-based system to monitor the city’s tourism mobility in the interests of sustainability. Part 2 of this feature will focus on the smart city efforts of Trikala, Thessaloniki and Athens.

Phase I has a budget of €90 million for 17 municipalities with a population of more than 100,000.

Phase II

The second phase of the Smart Cities program began in July 22, open to numerous municipalities with a population of up to 100,000. They were invited to submit their digital transformation proposals by the end of October 22. This phase has a budget of €230 million, funded by the ERDF (European Regional Development Fund). Eligible municipalities can receive funds between the wide range of €210,000 and €2,77 million, depending on the size of its population.

The program is directed at digital projects that meet the priorities of each municipality. The project categories of interest include sustainable mobility and enhancement of digital infrastructure

The program is directed at digital projects that meet the priorities of each municipality. The project categories of interest include sustainable mobility and enhancement of digital infrastructure. Municipalities were invited to select among various actions that best suits their needs, including:

• a smart parking system
• smart stops for public transportation
• a smart system ensuring access for people with mobility problems
• smart and disabled-friendly pedestrian crossings
• the selection of a digital twin city.

Phase II has a budget of €230 million for municipalities with a population of less than 100,000.

The research and innovation actions will address clean mobility, energy efficiency and green urban planning, and offer the possibility to build joint initiatives and ramp up collaborations in synergies with other EU programmes. No specific figure is readily available for Greece but we may assume a total figure of between, say, €15-20 million for the six municipalities. Here it is noted that Athens has recently being carrying out a ‘greening’ exercise on a number of parks and spaces in the city squares.

The 100 Cities Mission will receive a total of €360 million of Horizon Europe funding covering the period 2022-23, to start the innovation towards climate neutrality by 2030

With Horizon Europe it is estimated that the total figure will be €15-20 million for the six cities.

Net Zero Cities

The benefits for cities include technical advice and financial assistance from a dedicated Mission Platform run by NetZeroCities, additional funding and financing opportunities and the possibility to join large innovation actions and pilot projects. The Mission also provides networking opportunities and exchange of best practices between cities.

The Commission will invite the selected cities to develop Climate City Contracts, which will include an overall plan for climate neutrality across a number of sectors

The Commission will invite the selected cities to develop Climate City Contracts, which will include an overall plan for climate neutrality across a number of sectors including transport and energy, together with related investment plans. These Contracts will be co-created with local partners and citizens, with the help of a Mission Platform run by the project NetZeroCities. The Mission Platform will provide the necessary technical, regulatory and financial assistance to cities.

There will be support for research and innovation activities for developing, testing, demonstrating and scaling-up new and innovative solutions for climate neutrality in cities across sectors (e.g. energy efficiency, renewable energy, sustainable, safe and smart mobility, digitalisation etc.) through traditional calls for proposals but also through Horizon Europe new European partnerships. Contributions to the Cities Mission are also expected through Horizon Europe partnerships for:

• Towards zero-emission road transport (2ZERO) to accelerate the development of zero tailpipe emission transport in Europe for a climate-neutral and clean road transport system;
• Connected and Automated Driving (CCAM) to demonstrate inclusive, user-oriented and well-integrated mobility concepts, fostering cooperation between different transport modes, with increased safety, reduced congestion and a reduced carbon footprint.

A number of Horizon Europe Partnerships can also contribute directly or indirectly to the Mission’s objective, and synergies can be made to maximise the impact of their potential. For example, dedicated calls for cities participating in the Mission will be organised for demonstration projects (e.g. on hydrogen-fuelled public transport to have in the Mission the “first hydrogen city” in the EU).

Mission accomplished?

This Cities Mission is rooted in Research & Innovation (R&I), but activities supporting the Mission and its objectives under Horizon Europe will not be enough to cover the much larger funding and financing needs of cities in reaching climate neutrality. The cities themselves have limited resources and substantial investment will be needed to reach the objectives in the areas of energy efficiency, renewable energy, green transport, and many will rely on deployment of existing technology which lies outside the remit of the Horizon Europe Regulation – hence the need for the ERDF and RRF.

It is worth noting that the new Digital Europe programme (DG Connect) will support the transition to sustainability for cities through digital transition, in particular by helping cities procure interoperable, local data platforms that enable the management of cross-sectoral data flows and the engagement of a variety of stakeholders. The programme will also support the creation and validation of a data space for climate-neutral and smart communities. Examples of the validation projects could address mobility, energy management, zero pollution and climate mitigation.

The objective of the Cities Mission is to jumpstart research and innovation projects addressing clean mobility, energy efficiency and green urban planning.

FINANCING – The need for further financial support

InvestEU is a demand driven instrument that will provide repayable financing support (debt, equity) to a variety of eligible projects through implementing partners such as the European Investment Bank Group (EIBG), the European Bank for Reconstruction and Development (EBRD) and other National Promotional Banks. Supporting sustainable infrastructure, energy efficiency and clean transport are among InvestEU`s top priorities. Cities participating in the Cities Mission could therefore seek InvestEU supported financing for their green projects.

This facility could be a joint effort between the Commission and the EIBG and potentially other national and international financial institutions and would be supported through InvestEU, in particular the “Research Innovation and Digitalisation” and “Sustainable Infrastructure” windows. To this end, the EIBG and the European Commission has recently unveiled the InvestEU program of over €372 billion of investment in the EU. InvestEU will cover investments including sustainable infrastructure, research, innovation and digitization. The first InvestEU projects in Greece are expected to roll out in 2023.

The EIB Group will continue to deploy a range of financing structures that contribute to smart and green urban development. These include urban framework loans which can focus on climate investment, and which co-finance multi-sector investments across a 4-5-year time slice of a city’s multi-annual investment programme. Larger single investments are made into major projects such as urban public transport projects (i.e. investment loans). The majority of the investment needs will have to be covered by private investors (individuals, companies, commercial banks, other private investors). InvestEU and other EU Programmes can bolster future investments across the EU to help mobile private investments and provide advisory services to projects and operators in the area of sustainable infrastructure and mobile assets, as well as support innovative companies and SMEs in the areas of smart and sustainable mobility.

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