The European Investment Bank has given further details on European Project Bonds at a conference held in London on Monday 5 November 2012. The aim in creating European Project Bonds is, in the words of the EIB, to “address a shortfall in infrastructure funding for deals unable to access the debt capital markets”. This shortfall is at the heart of the problems in procuring large-scale infrastructure projects in Europe since 2008; and while various solutions have been suggested to the problem, none have yet managed to bridge the gap created by the withdrawal of the monoline insurers and much of the bank funding from infrastructure development after the credit crunch.
Mark Swindell of Rock Infrastructure has been involved in the creation of Project Bonds since he jointly commissioned the European PPP Report 2009 with EPEC, the arm of the EIB with responsibility for the creation of European Project Bonds. That report called for the creation of “a European wide bond…that could wrap the risk as the triple A rated monolines used to”.
While it has taken some time for European Project Bonds as envisaged in 2009 to become a reality, the pilot phase is due to commence shortly, with the signature of a co-operation agreement with the European Commission expected on 7 November and a list of pilot projects having been drawn up. European Project Bonds offer the real prospect of re-starting the infrastructure pipeline in Europe, after numerous false dawns.
