1 presentation to diplomatische akademie wien european infrastructure financing what new...
Post on 19-Dec-2015
213 views
TRANSCRIPT
1
Presentation toDiplomatische Akademie Wien
European Infrastructure FinancingWhat new developments are occurring?
2 June 2004
2
• Created by the Treaty of Rome in 1958, to provide long-term finance for projects promoting European integration;
• Subscribed capital EUR 163.7bn;
• EIB shareholders: 25 Member States of the European Union
• EIB’s lending in 2003: EUR 42bn (EUR 34bn within the EU); funds raised via bonds
• “not for profit” - organisation
European Investment Bank: European Union’s Financing Institution
3
Economic and social cohesion in an enlarged EU
Support for SMEs
i2i, R&D, Dissemination of innovation, technology networks,education, health
Environmental protection and improvement
Support for EU development aid and cooperationpolicies
Promoting European Union policies
EIB PROJECT ELIGIBILITY
Development of Trans-European and access networks
4
• Low cost of "AAA" rating funding benefit passed on to clients;
• Large amounts;
• All major currencies, including more and more those of the New Member States;
• Long maturities;
• Catalytic effect of participation on other banking or financial partners.
WHAT ARE THE BENEFITS OF AN EIB LOAN
5
In 2003, EUR 4.6bn for investments in the 10 New Member States in Central and Eastern Europe, Cyprus and Malta
FOCUS:
FINANCING EU ENLARGEMENT
Communications infrastructure (including TENs);
Regional development;
Industrial competitiveness (including Foreign Direct Investment);
Environmental protection;
Health and Education
5
6
EURm
Acceding states
Accession states
Applicant states
Candidate states
--------
Energy
Communications
Water
Industry
Education,Health
Global loansA firm commitment to accession
Poland 4 860Czech Rep 3 160
Hungary 2 149
Cyprus 705
Malta 25
Slovenia 974
Lithuania 249
Latvia 276
Estonia 192
LOANS IN THE NEW MEMBER STATES1999-2003: EUR 13.5bn
Slovakia 880
6
7A firm commitment to accession
LOANS IN ACCESSION, APPLICANT AND CANDIDATE STATES 1999-2003: EUR 6.1bn
Romania 2 175
Bulgaria 565
Turkey 2 197
Serbia & Montenegro 498
Croatia 446
Albania 108FYRM 93
Bosnia-Herzegovina 185
EURm
Acceding states
Accession states
Applicant states
Candidate states
--------
Energy
Communications
Water
Industry
Education,Health
Global loans7
8
EIB PPP Signatures p.a.(MEUR)
0
500
1000
1500
2000
2500
3000
3500
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
/06
9
• Long term Public Sector Political Commitment and adequate financial involvement of the public sector
• Focused, dedicated and experienced public sector team – PPP Task Force.
• Favourable legal and institutional framework.
• Transparent + competitive procurement (concept, construction and operation phase)
• Realistic risk sharing.
• Partnership.
“Must” for successful PPPs
10
Learning Process
Extra costs
Value added
Benchmarking
Risk-sharing
Procurement
Extra costs of PPPs
Value added
11
TRANS-EUROPEAN NETWORKS ANDEUROPEAN TRANSPORT CORRIDORS
Projects financed by the EIB (1993-2003)
Oil/Gas platform
Priority TENS
Section financed
Other TENS
Transport corridors, CEC
Section financed
Road/Rail
Airport
Electricity
Gas
Air traffic management
Port
Inter-modal freight centre
Projects of multi-regional character
12
1. Reconfirmed European PrioritiesA new start for a quicker
implementation of TENs after the “van Miert Group” proposals
13
Reasons for sluggish TENs implementation
• Absence of common priorities / timetables • Structural constraints (e.g. technical interoperability;
limited deregulations)• Administrative, legal and environmental requirements• Inadequate economic viability• Limited commitment of state funds but need for high
public financing and grant support
14
TENs after “van Miert”
• Total investment requirements up to 2020 estimated at EUR 235 billion in “priority projects”.
• 8 “priority projects” concerning investments in Central Europe. Austria is represented with 6 cross-border projects, i. a. the “Brenner Basis Tunnel”
• Total investment requirements in overall TEN infrastructure estimated at EUR 600 billion.
• EIB indicated as key financier for these projects.• However : lack of financial resources is not the main
cause of slow project implementation.
15
TEN Railway Priority Projects
• Completion before 2007 : – Fast rail connection Paris, Brussels, Cologne, Amsterdam, London– Cork-Dublin-Belfast- Stranraer– Betuwe Line– Öresund Link (completed)
• Completion before 2010 : – Nürnberg-München/Kufstein-Innsbruck– Madrid-Barcelona-Perpignan; Madrid-Hendaya– TGV Est– Torino-Venezia– Multimodal link Portugal/Spain with rest of Europe– Kerava-Lahti– West Coast Main Line
16
TEN Road Priority Projects
• Completion before 2007 : – none
• Completion before 2010 : – Lisbon/La Coruna; Lisbon/Valladolid; Lisbon/Seville (as part of
the multimodal link Portugal:Spain with rest of Europe)– Helsinki/Turku (as part of Nordic Triangle)– IRL/UK/BENELUX road link
17
TEN Long-term Horizon Projects
• Firm government commitment for projects to be operational by 2020 : – 8 railway projects in a list of total 18– 2 motorway projects– 4 intermodal projects
• Longer-term horizon projects : – 3 railway projects in a list of total 4– no road project
• Cohesion projects : – Accessibility and interconnections of networks– Cross-border connections
18
TEN Long-term Benefits
• Time savings equivalent to EUR 8 bn/year• Reduction of CO2 emissions by 17 m tonnes/year• Reduction of other emissions equivalent to
external costs of EUR 700 m• Stimulate international trade, in particular in
Central and Eastern Europe• Safety improvements• Boost GDP growth by 0.23% pa
20
Financing for Trans European Transport networks
• Substantial public sector investment in TENs networks• EU budgetary sources, EIB finance and private sector PPP
finance as complementary sources• Role of public financing nevertheless remains a keystone in
major new infrastructure investments
21
EIB’s role in TENs growth initiative
1) Expand EIB financing commitments by increasing its capacity for existing senior debt
2) Increased acceptance of project risks through the EIB “Structured Finance Facility” instruments
3) Use of financing instruments including EIB guarantees and provision for equity and mezzanine finance
4) Increase leverage of EIB financing instruments by a. more effective combination with EU budgetary funds and guarantees
b. increased co-financing with capital, banking and insurance markets
5) Capitalise on substantial EIB experience by greater utilisation of EIB expertise in support of public authorities (e.g collaboration with national PPP Task Forces and specialist infrastructure entities)
New TENs Investment Facility (TIF):5 products
22
(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%)
23
Equity investors (contractor,
concession holder, etc.)
EIB
Project
Capital markets /
banks
Share capital
Long and medium
term loans
Senior secured or guaranteed
extra long term loan
(1) Increased EIB senior lending
24
(2) 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
25
EIB
Project
Junior lenders and equity
Capital markets /
banks
Long term loans
Medium term junior loan and share capital
(2) Increased “Structured Finance Facility”
26
(3) EIB and EU guarantees
• 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 assured through EU financial markets
27
EIB
Project
Capital markets /
banks
Private
sector
Member States &
EU
Guarantees Funding
(3) EIB and EU guarantees
28
(3) Equity and mezzanine finance
• Unquestionable lack of equity and mezzanine finance for infrastructure projects. However: investments must pay!
• Increase availability by leveraged investment with private sector infrastructure funds
• Equity and mezzanine available to priority TENs projects • Equity funding for PPP project companies and construction
sector
Increase multiplier effect of EIB / EU finance by establishment of infrastructure funds
29
Projects
Infrastructure funds
EIB
Fund 1
EUPublic
authorities
Private financiers
Fund 2 Fund n
Equity and mezzanine
(3) Equity and mezzanine finance
30
(4) Strengthen EIB Institutional Role
• Strategic Advisor to the Commission, to Member States and Public Authorities on TENS (in particular realization of QSPs).
• Information on financing techniques used in Europe.
• 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.
• Collaboration with EU-TENs Project Co-ordinators.
31http://www.eib.org
Address : 100, Boulevard Konrad Adenauer, L-2950 LuxembourgContact : Franz-Josef Vetter
Tel : 00.352.43.79.72.26e-mail : [email protected]