Download M. Boeuf - European Commission

Second International Workshop
on PPPs
EIB financing of PPPs: the way forward
Patrick Bœuf
Projects Directorate
European Investment Bank
Brussels, 5 July 2004
EIB’s approach to PPPs


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Policy driven approach to PPPs based on the evaluation
of the benefits achievable
PPPs are an additional policy option. No bias in favour
of any particular procurement method
Expand expertise and financial resources available for
“infrastructure” investment
Facilitating greater private sector investment (cf.
Presidency conclusions on the Growth Initiative,
Brussels European Council, 12 December 2003)
Focus on strategic public services with clear value
added
Key PPP sectors for EIB
Supporting PPPs in areas of critical EU policy
significance:

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TENs and modernising transport infrastructure
Environmental improvements
Primary and acute healthcare services
Primary, secondary and tertiary education
EIB loans for PPP/Concession
projects - Approvals
TOTAL
TRANSPORT
WATER
HEALTH/EDUCATION
MEUR
MEUR
MEUR
MEUR
TOTAL
28845
24883
1146
2549
AUSTRIA
170
170
BELGIUM
805
DENMARK
3592
3592
FRANCE
1838
1838
GERMANY
1048
1048
GREECE
2503
2503
IRELAND
482
377
NETHERLANDS
818
693
POLAND
275
275
PORTUGAL
3615
3531
84
SPAIN
4680
4620
60
SWEDEN
749
749
UNITED KINGDOM
8270
5487
805
105
125
73
2444
EIB TRANSPORT LENDING - PPPs (LOANS SIGNED IN MEUR)
3500
3000
2500
2000
1500
1000
500
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
EIB TRANSPORT LENDING
PRIVATE
100%
90%
80%
PPP
70%
60%
50%
40%
30%
PUBLIC
20%
10%
0%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Flagship deals to date - transport
DBFO roads and river crossings in the UK.
Channel Tunnel Rail Link and London Underground.
Spanish & Portuguese transport projects
(inc. Vasco de Gama Bridge).
Spata airport, Athens ring road and Rion Antirion bridge.
Dutch high speed train link.
French and Irish motorway concessions
PPPs and EU grants
Spata airport
EU funding: Cohesion Fund 11%, EIB loan 47%
 Greek State contribution 19%
 Commercial debt 17%
 Equity 6%


SPV: Athens International Airport S.A (55% Greek
State, 45% Private Consortium)

Construction costs overruns +1.8%
Construction delays: 3 months in advance

Announcement of the
Tender
SPATA AIRPORT
DURATION OF PROJECT
IMPLEMENTATION
5
19
25
2 9
56
6
(Time in months elapsed in each phase)
Pre-selection of
Bidders
Submission of Offers
Signing of the
Concession Contract
(C.C.)
Ratification of the
C.C.by Law
Signing of Financial
Contracts
Total (10 years)
Commencement Date of
the C.C
Construction period
PPPs and EU grants
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Upfront subsidies Vs. operating
subsidies/payments
Coordination between ERDF, Cohesion Fund,
TENs budget
Coordination with other public grants (national,
regional, local)
Coordination with EIB financing
Need for streamlined procedures – avoid
multiplication of approval procedures
The TENs Investment Facility

Strengthen and, where possible, accelerate
the investment in TENs.

Increase the EIB resources available for the
development of TENs transport to 2010.

Improve the range of financial instruments
available from the Bank.
… in collaboration with the Commission, Member
State Authorities and the Private Sector.
The TENs Investment Facility
5 Building Blocks
1.
Long term loans – Senior Debt for PPPs, Corporates
and Public bodies.
2.
Guarantee system – for Investment Grade Projects.
3.
Structured Finance Facility – SFF.
4.
Securitisation.
5.
EIB institutional role.
(1) Increased EIB senior
lending
Proposal
 € 50 billion over period 2003-2010.
 Extra long maturities (35 years).
 Longer grace periods.
 Special arrangements for exceptional cases
(e.g. up to 75%).
(2) EIB and EU guarantees
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

EIB to provide guarantees for private finance projects
with investment grade rating.
Combine EIB guarantees with public sector guarantees
so as to optimise the “value for money” and
“affordability” of priority investment.
The EU financial regulators should examine the Basle
II regulatory framework to ensure that TENs financing
can be effectively achieved through EU financial
markets.
(3) Increased “Structured
Finance Facility”


SFF is an existing EIB senior debt product to finance
higher risk projects (e.g risk during construction).
Tripled from Euro 500 m to Euro 1500 m.
(4) Securitisation
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

Financing institutions / SPVs, promoted by public
authorities, to issue AAA bonds securitised by
revenues from portfolio of existing infrastructure
assets held by Member States / public authorities.
Purchase of securitisation bonds by financial
institutions co-financed by EIB, the capital and
banking markets.
Proceeds of securitisation bonds to be dedicated
by public authorities to priority infrastructure
financing.
Release new resources to be
invested in TENs
(5) Strengthen EIB Institutional Role
Strategic Advisor to the Commission, to Member States and Public
Authorities on TENS.
Financial Engineering of TENs projects through PPPs, Structured
Finance, Securitisation and Capital Markets.
Proposed operator of Commission Guarantee Facility for TENs.
Combined use of budgetary resources and EIB loans for TENs.
Collaboration with national PPP Task Forces on TENs.
Co-financing with specialist national financial institutions of SPVs and
securitisation trusts for TENs.
Collaboration with TENs Project Co-ordinators.