Europe 2020 Project Bond Initiative

Source: European Commission

Deadline: 02 May 2011   

The Europe 2020 Strategy for smart, sustainable and inclusive growth sets out a vision of Europe's economy over the next decade. To underpin the Europe 2020 and in order to complete the internal market, record investment volumes will be needed over the next decade in Europe's transport, energy, information and communication networks. Preliminary estimates point to investment needs of EUR 1.5 to 2 trillion This reality, combined with the fact that government budgets face severe pressures, make it crucial to foster the participation of the private sector in the financing of infrastructure projects.  The principal idea behind the Europe 2020 Project Bond Initiative is to provide EU support to project companies issuing bonds to finance large-scale infrastructure projects. The Initiative aims to attract additional private sector financing of individual infrastructure projects by improving the rating of the senior debt of project companies, thereby ensuring that this can be placed as bonds with institutional investors. The Commission's key role will be risk-sharing with the EIB (or other financing partners), enabling them to provide the described credit enhancement. No bond issuance will be required by Member States' governments, the EU or the EIB for this purpose.