Brussels, 14/05/2013 (Agence Europe) - Almost a year after the European institutions' agreement on the “project bond” pilot phase last July, the president of the European Investment Bank (EIB), Werner Hoyer, said that he was optimistic about the bonds and acknowledged that the credibility of this innovative financial instrument would depend on the success of the first project.
“Project bonds” are bonds for major infrastructure projects. They aim to attract private financing for infrastructure in Europe by limiting risk. Since July 2012, €230 million has been made available for the pilot phase as overseen by the EIB and European Commission. This funding is expected to be released by way of a private investment leverage effect, to the tune of €4.6 billion.
The first pilot phase for the projects (around 10 of them) is expected to be launched by the end of the year. They will be distributed throughout several different zones of the European Union explained the president of the EIB, Werner Hoyer, on Monday 13 May, during a joint conference with the Committee of the Regions (see other article). He also stated that, “there will be no concentration in any single part of Europe” and added that the pilot phase would focus more on transport infrastructure than on energy or telecommunications.
Hoyer underlined the importance of the first test on the market for these bonds and said that, “we need to be certain of the first project succeeding, if it doesn't, the whole idea could be discredited”. If the pilot phase proves conclusive, the Commission would then be able to improve the financial engineering and introduce it on a more widescale basis (our translation throughout). (MD/transl.fl)