Latest Qatari investment entering the final stretch
The sale to private investors of Athens?s former international airport in the southern suburb of Elliniko seems to be entering the final stretch, as the fund responsible for selling state assets has suggested that it will be ready to issue a call for tender by the end of November and name an investor by mid-2012.
One of the names that have been closely linked to the sale of the prime real estate holding at Elliniko is that of the Qatar Investment Authority (QIA), which has already shown significant interest in Greece, with two large investments already completed, one canceled and another in the works.
The first of these is the QIA?s investment of 500 million euros in the new Alpha-Eurobank, which is scheduled to start operating in the new year, the result of the merger in August of Alpha Bank SA, Greece?s third-largest lender, and EFG Eurobank Ergasias SA. The second is to the tune of 1 billion euros in mining firm European Goldfields, which was announced earlier this month.
The QIA withdrew its interest in investing an estimated 10 billion euros for the construction and operation of a liquefied natural gas (LNG) terminal and power plant at the western Greek port of Astakos in October last year.
Qatar began showing an interest in Greece in 2010, when the price of investing in the debt-burdened country began to plummet. Meanwhile, social and political unrest in the Middle East and North Africa threw a spanner in the works of a number of Qatari investments in those regions, making markets such as Greece more attractive.
However, the Qatari investments are by no means an act of charity.
The 1-billion-euro investment in two gold mines in the northern Greek region of Halkidiki – in the form of a loan – comes with added tag of a 9.3 percent interest rate, or 7 percent above the benchmark LIBOR interbank rate of the last six months.
Nevertheless, an injection of such an amount is nothing to be sniffed at given the state of Greece?s finances right now.
The brass ring for Qatar, however, was and remains the filet mignon of Attica real estate, Elliniko, where it is estimated that the QIA may invest up to 7 billion euros in a luxury Riviera-style development of the area. The investment, however, had been put on hold after Greece?s creditors – the European Union, especially, which has made the sale of state assets a term in its agreement with Greece for financial assistance – vetoed the possibility of a bilateral agreement between Athens and Doha.
Nevertheless, Qatar?s interest seems to remain unwavering, especially given that last week a representative from Greece?s Privatization Fund briefed Qatar?s ambassador in Athens, with the focus of the meeting being on Elliniko, according to sources familiar with the negotiations.
Elliniko is also believed to have been the main topic on the agenda of talks between Greek Prime Minister George Papandreou and Emir of Qatar Sheikh Hamad Bin Khalifa Al Thani, who met in Athens on October 1.
