Post-RRF era set to bring new financing model for major projects

The need for new infrastructure is estimated at €40–50 billion, while approximately €10 billion worth of projects are already under construction for the 2026–2030 period, according to data presented at the 9th Infrastructure and Transport Conference – ITC 2026. The annual investment gap is estimated at €6–8 billion, according to Christos Panagiotopoulos, CEO of TERNA.

The completion of the Recovery and Resilience Facility (RRF), despite its relatively limited contribution to project financing, is creating a funding gap that cannot be covered solely through the state budget and European programmes.

The RRF, which operated primarily as an accelerator, imposed binding deadlines that forced public authorities and construction companies to compress delivery timelines and increase their productive capacity.

The New Role of Construction Companies

The model under which the state secures financing, tenders the project and the contractor is primarily responsible for construction is expected to become less dominant. Major construction groups are increasingly being called upon to participate in financing, invest their own capital, and assume the operation and maintenance of infrastructure over extended periods.

Dinos Benroumbis, Vice Chairman and CEO of METKA S.A., described this new role as a combination of contractor, investor, maintenance provider and operator.

This shift is increasing the importance of Public-Private Partnerships (PPPs) and concessions, as well as construction groups’ ability to raise bank and investment capital.

The potential project pipeline includes €1.5–1.8 billion in building PPPs, approximately €1.2 billion in railway projects, with participation from the Connecting Europe Facility, as well as more than €1 billion in environmental PPPs.

At the same time, the volume of construction activity generated by purely private investment in tourism, logistics, real estate and energy is increasing.

The 0.25% Cap

The current framework provides that total annual availability payments for PPP projects may not exceed 0.25% of GDP, based on the projections contained in the latest available Medium-Term Fiscal Strategy Framework.

The cap was introduced to ensure that the long-term obligations undertaken by the state through PPPs remain manageable. Availability payments cover not only construction but the overall cost of project design, financing, maintenance and operation. With nominal GDP at approximately €250 billion, the 0.25% threshold corresponds, indicatively, to around €625 million per year.

This cap represents a significant constraint on the use of non-revenue-generating PPPs as a general solution to the infrastructure investment gap. The more projects that enter the availability-payment model, the less room there is for adding new long-term obligations.

This is shifting greater attention towards concessions and projects capable of generating their own revenues.

AKTOR sees scope for expanding the concession model. Anastasios Aranitis, CEO of AKTOR Construction, referred to the extension of the Olympia Odos motorway towards Pyrgos as an example of how an existing concession can be leveraged to deliver additional infrastructure.

Similar models could be considered for new road projects, while companies also see significant opportunities emerging in water infrastructure.

Dams, water supply and irrigation projects, flood protection works, network modernisation and systems aimed at reducing water losses are creating a new market for the sector. Around 50 major water projects worth €1.2 billion are already under way, while a further 130 projects with a total value of €2.8 billion are currently under evaluation.

Significant activity is also expected in railways, ports, energy and infrastructure related to climate resilience.

Available resources, however, are increasing the need to prioritise mature projects. Antonis Mitzalis, Executive Director of the AVAX Group, highlighted the need for more consistent long-term infrastructure planning, including the identification of needs, prioritisation of investments and monitoring of project maturity. Project readiness is becoming increasingly important, as delays in land expropriations, permitting and studies continue to affect both implementation costs and timelines.

Rising costs represent another constraint. TERNA estimates that increases in the cost of materials and energy have reached approximately 30%, while companies are calling for mechanisms that would allow long-term contracts to be adjusted in response to significant changes in market conditions.

At the same time, shortages of engineers, skilled technicians and equipment operators are limiting the sector’s ability to further increase output.

In the new environment, concessions, PPPs, European programmes, banks, capital markets and the construction groups’ own equity will need to be combined to a greater extent, while the state will need to adopt stricter priorities regarding which projects it can support.