The Greek government, in an effort to attract international investments in the data centre market and establish Greece as a digital hub, passed Law 5069/2023 on building and construction regulations and permitted uses of land for data centres (“Law 5069”), amending Law 4442/2016 on the exercise of economic activities (“Law 4442”) and set in place for the first time a distinct regulatory framework for the construction and operation of data centres in Greece.
"The Greek government, in an effort to attract international investments in the data centre market and establish Greece as a digital hub, set in place for the first time a distinct regulatory framework for the construction and operation of data centres in Greece."
Further, given both the large electricity needs of data centres and the limited electrical space in many areas in Greece, an energy map, including data centre siting, is being prepared by the Greek transmission system operator and expected to be announced to highlight the most appropriate areas for the development and operation of such projects.
In light of Law 5069 and the increased investment interest from major players in the data centre market in Greece, the following is an overview of the applicable legal framework, focussing on the main provisions of Law 5069, the environmental permitting requirements for data centres and the incentives granted by strategic investments legislation.
Article 3 of Law 5069 defines data centres as the facilities (including the infrastructure and installations necessary to support the power supply and environmental control) which are intended to centrally host, interconnect and operate information technology (“IT”) equipment (computer, network and telecommunications equipment), provide services related to the storage, processing and transfer of data or cloud computing service and have the required levels of resilience and security to provide services with specific availability.
According to Law 4442, the exercise of economic activity may be subject to a prior notification obligation to the competent authority aiming to protect public interest if the following conditions apply cumulatively:
(a) the exercise of economic activity based on objective criteria and current scientific and technical knowledge is harmful, or can potentially be harmful to the public interest, especially to the health and safety of employees, neighbours, the public and the natural or cultural environment in general, and the level of danger and its potential effects are of a magnitude that excuse the subjection to the notification obligation; and
(b) the notification of economic activity to the competent authority is necessary to prevent harm or danger.
Data centres are subject to the notification obligation set out in Article 5 of Law 4442 in the following cases:
(a) if the data centre provides services to third parties in part or in whole, and the total nominal electricity capacity of its IT equipment is equal to or greater than 200 kW;
(b) if the data centre does not provide services to third parties but serve exclusively the benefit of another economic activity of the same user (self-use) and the total nominal electricity capacity of their IT equipment is equal to or greater than 1,000 kW.
Data centres not falling within the above specifications are not subject to the notification obligation of Article 5 of Law 4442, but they are not exempted from any other obligations set in the relevant legislation.
Operators of data centres with obligation a) of notification of operation; or b) of change to the data centre operator, must notify the competent authority and pay an administrative fee.
Prior to the notification, the data centre operator is obliged to collect the supporting documents, which must be kept within the premises of the data centre and be readily available in case of inspection from any competent authority.
Further, in any case where the details of the notification of operation change, the data centre operator is required to notify in advance the competent authority.
Similarly, in the case of relocation of the data centre, a new notification of operation shall be required.
Law 5069 provides for an administrative fine ranging between €1,000 and €20,000 in case of the following infringements in relation to the notification procedure:
(a) omission of notification,
(i) before operation commencement (initial notification);
(ii) in case of a change in the details of the notification, and a change of operator;
(b) notification of information, which is false, inaccurate, or incomplete; and,
(c) lack of supporting documentation.
Apart from those fines, any infringement of the applicable legislation may also lead to the imposition of other penalties.
Data centres are included in a special land use category of Presidential Decree 59/2018. The construction and installation of data centres is permitted in (i) areas where the special land use category is allowed; and in (ii) areas where there is no land use designation if construction is not prohibited by other more specific provisions.
According to Article 5 of Law 5069, the building requirements for data centres are set as follows and supersede any previously set urban planning limitations:
| DATA CENTRE BUILDING REQUIREMENTS | |
|---|---|
| Maximum Building Factor | 0.8 |
| Maximum Coverage Rate | Sixty percent (60%) |
| Lateral distances of the building from the boundaries of the land | 10 metres |
| Maximum floor area factor | 6 |
Further, data centres are classified according to the electrical power of their IT equipment, as follows:
(i) data centres which have IT equipment with an electrical power equal or greater than 200 kW are assessed based on the “Industry – Craft Industry” category of Decision ΥΠΕΝ/ΔΑΟΚΑ/66006/2360/16.6.2023 of the Ministry of Environment. This category includes those buildings or parts of buildings or structures housing industries, craft industries, workshops, laboratories, services with significant electromechanical equipment.
(ii) data centres which have IT equipment with an electrical power off less than 200 kW are assessed based on the “Offices” category of Decision ΥΠΕΝ/ΔΑΟΚΑ/66006/2360/16.6.2023 of the Ministry of Environment. This category includes buildings or parts of buildings used for intellectual or administrative activities, whether public or private, or for business activities, provided they are not included in the commercial category.
Article 8 of Law 5069 establishes the obligation to create parking spaces within the premises of the data centre, the exact number of which will be linked to the total area of the data centre facilities.
"Projects strategically important for the local or national economy may be granted incentives to aid their development and operation, and data centre projects are eligible to be recognised as strategic investments."
The environmental licensing procedure is currently regulated by Law 4014/2011 and its secondary legislation. All public and private projects and activities are classified in categories and subcategories depending on their environmental impact and significance to determine the environmental licensing procedure which must be followed:
(a) Category A: which is subcategorised as follows:
(i) Subcategory A1: projects which may have very significant impact on the environment; and
(ii) Subcategory A2: projects which may have a significant impact on the environment.
Projects falling under Category A need to obtain an Environmental Terms Approval (“ETA”) from the competent authority. In general, the environmental permitting process starts with the submission of an Environmental Impact Assessment file along with the supporting documentation to the competent environmental licensing authority. A consultation period follows, during which the competent opining authorities and administration bodies (such as archaeological, forest and siting authorities) submit their opinions on the EIA file to the licensing authority and, following that and provided there is a positive evaluation, the ETA is issued.
(b) Category B: projects which may have a local and insignificant impact on the environment. Those projects don’t need to obtain an ETA, but are subject to general environmental protection standards, terms and restrictions, as these are set out in their Decision on Standard Environmental Commitments.
According to Ministerial Decision ΔΙΠΑ/οικ.37674/ 2016 (GG 2471 B’) as amended and in force, data centres are classified into the 12th Group of Special Projects and Activities as follows:
(i) data centres with installation electricity capacity equal to, or larger than 20 MW, fall under environmental Category A, Subcategory A2; and
(ii) data centres with installation electricity capacity equal to, or larger than 2 MW and up to 20 MW, fall under environmental Category B.
Law 4864/2021 (“Law 4864”) as amended and in force gives the opportunity to projects which meet specific eligibility criteria and are strategically important for the local or national economy to be characterised as “strategic investments”. Such projects may be granted incentives to aid their development and operation, and data centre projects are eligible to submit an application to be recognised as strategic investments.
Depending on their classification under Law 4864, strategic investments may be eligible to receive one or more of the following incentives:
(a) siting incentives: For the purposes of the implementation of a strategic investment, the Greek Ministry of Development may introduce a Special Plan for the Siting Development of Strategic Investments in relation to a single land surface. A non-adjacent land surface may be included in the plan, under specific conditions. Forced expropriation of land plots required for the implementation of the project may also be approved;
(b) continuous routing permission incentives: To serve the construction needs of strategic investment projects located in remote areas -such as islands and hard-to-reach coastal settlements– extraordinary routing to and from suitable ports may be granted to vessels that serve such needs;
(c) tax incentives: strategic investment projects may benefit from a guaranteed, stable tax rate, a favourable taxation regime of gross accumulated profits and accelerated depreciation allowances for fixed assets. Tax incentives are granted as individual aid in accordance with the Commission Regulation (EU) 651/2014 subject to the thresholds of such regulation, or upon approval of the European Commission;
(d) fast-track licensing incentives: Projects characterised as strategic investments may benefit from a fast-track licensing procedure regarding the issuance of the required permits and approvals for the construction, installation or operation of the project (including the environmental permits). Project companies may submit to the competent authorities complete permitting files, which will be reviewed and processed with priority. The relevant permit will be issued in a shorter period, in accordance with the provisions of Law 4864;
(e) subsidised costs incentives: Strategic Investments may be eligible to receive subsidy in the form of an amount granted as financial aid to cover a portion of the project costs. Such costs may be related to recruitment of disadvantaged workers, research and development, acquisition of new mechanical and other equipment, salary expenses for newly created jobs etc.
Athens Trainee Dimitris Mavroudeas also contributed to this article.
Partner Athens
Senior Associate Athens
Partner Athens
Senior Associate Athens
