Brussels, 08/11/2012 (Agence Europe) - The European Commission and the European Investment Bank (EIB) are in the pilot phase of the initiative for loan obligations devoted to infrastructure projects, commonly known as “project bonds”. The European commissioner for financial affairs, Olli Rehn, and EIB President Werner Hoyer signed, on Wednesday 7 November, a cooperation agreement between their two institutions, constituting the second stage in launching the pilot phase of the €230 million financial instrument. The pilot phase should have a €4 billion lever effect in the form of investments by the capital market in transport, energy and telecom infrastructures.
Hoyer explained in this respect that “the EIB has made considerable progress in screening trans-European transport and energy networks and broadband projects and helping them to have access to capital market financing. The pipeline of potential projects looks prominent with first expected project signatures in early 2013”. Three projects are said to be well on track for benefitting from the support of project bonds, but up to a maximum of 20% of their total cost. These are motorway projects in Belgium and Germany and offshore wind farms in the United Kingdom, an EIB source has announced. Other projects are being studied for completing a list of seven to eight projects, the names of which will not be revealed until the first quarter of 2013.
Rehn explains that: “The key idea is to use EU budget funds and the EIB's balance sheet and expertise more efficiently, so that certain long-term infrastructure projects can attract capital market financing, for instance, from insurance companies and pension funds, when the banking sector is still deleveraging”. The project bonds are starting at the right time as infrastructure investment needs in Europe need a great deal of funding and “a return to infrastructure financing is clearly on the menu worldwide as international investors look for better return opportunities. Europe has an interest to be on their radar screen!” (MD/transl.jl)