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Über dieses Buch

This book analyses the project bond financing solution in detail, identifying all the specific features that make it highly suitable for large capital intensive infrastructure projects.




Stagnant growth and a decline in infrastructure spending have been major causes of concern in Europe, and different policy measures to address these problems have been taken. The new EU Commission EUR 315 billion Infrastructure Investment Plan for 2015–17 (launched at the end of 2014) and the European Central Bank launch (in January of 2015) of quantitative easing accommodative monetary policy are the latest two initiatives that could have a strong impact on the European infrastructure market. The consequences can be far reaching on the project finance arena. A significant one could be helping to close the market gap existing between the demand and supply of capital at the project bond market level.

Emanuele Rossi, Rok Stepic

1. Project Finance

The project finance topic, even if it is a well-known subject for many practitioners, is still a very complex financing process with many peculiarities not always entirely understood by non-specialists.According to Basel II Capital Accord project finance is defined as one of the five subclasses of specialized lending activity. In this sense, it is a very specific lending business with its own rules and procedures. For this reason, banks tend to create within their organization dedicated business units with specialized resources and competences. Hence, there is a need to provide a general overview that can cover not only the main features of project finance but also more detailed aspects such as the public-private partnership (PPP) scheme or the critical differences between Greenfield and Brownfield projects.

Emanuele Rossi, Rok Stepic

2. European Infrastructure Project Finance Market

Project finance in Europe has been negatively impacted by recent events; however, there is widespread opinion on the necessity of relaunching a certain level of investment in European infrastructure.Even if it is far from clear which are the sources of the investment deficit, infrastructure assets still offer very interesting characteristics to the institutional investors in order to widen their participation in future investments.Rather than a low demand for long-term capital to be invested in infrastructure projects, there seems to be an insufficient supply of long-term finance. In any case, a higher supply of capital for this particular market segment is not granted and needs to be encouraged and assisted by policy measures.

Emanuele Rossi, Rok Stepic

3. Bank Conventional Lending versus Project Bond Solution

Project bonds, which can act as a substitute for a conventional term loan bank financing, are surely the best alternative financing solution. We have noticed several recent project finance deals involving project bond funding in the European market, and it is adapting quickly to the changing market situation. From a general perspective, it is important to highlight and examine the advantages and disadvantages comparing a traditional amortizing bank loan versus a project bond funding solution. This is crucial in order to help us illuminate the decision-making process for the best available financing structure solution for prospective projects.

Emanuele Rossi, Rok Stepic

4. The Europe 2020 Project Bond Initiative

The new instrument of the Project Bond Initiative (PBI) developed jointly by the EU and EIB was established with the aim of relaunching and revitalizing the project bond market in Europe, which reached a standstill in the aftermath of the financial crisis. Looking at its funding experience in transactions coming from Western Europe projects achieving the financial close during the initial pilot phase, we try to extract from the available case histories the main features and the best practices that have triggered the success for financing these projects so far.

Emanuele Rossi, Rok Stepic

5. Case Studies in CEE

The empirical European market evidence shows how the project bonds, as an alternative financing solution in certain infrastructure projects, can play an important role.The case studies discussed come from the CEE region. Since the whole pilot phase of PBI has been implemented exclusively in Western Europe countries so far, we analyse the conditions that can sustain successful project bond issuance in CEE countries.In particular, the Slovakia case is deemed to be the example of an emerging market being more ready to experiment with project bond issuance, where the EIB Project Bond Credit Enhancement scheme could be helpful and work very well.

Emanuele Rossi, Rok Stepic


We have provided an insight into the European market comparing project bond funding to conventional bank lending as an alternative financing solution for infrastructure project finance. We have seen the real benefits from the EIB Project Bond Initiative, how it is applied to the real examples and its main requirements to become applicable.Our analysis helps to understand the conditions which need to be met to enable a project bond as a suitable financing solution. On top of that, we are able to identify the main innovative features of project bonds in combination with the Project Bond Credit Enhancement scheme.

Emanuele Rossi, Rok Stepic


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