The EU has promoted the Project Bond Initiative (PBI) to increase the attractiveness of large-scale infrastructure funding to institutional investors such as pension funds and insurance companies. A study undertook a strengths, weakness, opportunities and threats (SWOT) analysis of pilot case studies and found that the PBI may facilitate infrastructure financing in Europe, but certain challenges need to be addressed.
The EC 2020 Agenda envisages a €1.5 – €2 trillion investment in energy, transport, and information and communication technology (ICT) to promote growth, employment and convergence across regions. However, raising long-term financing for infrastructure has become a challenge since the 2008 economic recession. In 2010, the EC launched the Europe 2020 PBI to increase strategic infrastructure investment. The aim of PBI is to use EU funds for credit enhancement and to encourage institutional investors (i.e. pension funds and insurance companies) to finance largescale European infrastructure. Institutional investors are potential buyers of long-term project financing securities. The PBI recognises capital markets as an alternative source of funding for infrastructure projects.
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Source: TRIMS, European Commission
