, 2011. All rights reserved M. Kollatz-Ahnen Vice President 17. May 2011
1. The European PPP Market 2. EIB s support to PPPs 3. EIB as European Policy Partner
EIB and the European PPP Market In 2010, the European PPP market recently showed first signs of recovery. EIB s gap filling role through the financial crisis let to a record lending volume of EUR 3.4 bn. 30 25 20 15 10 5 EUR bn 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 European PPP Market 112 PPP transactions reached financial close in 2010 with an aggregate value in excess of EUR 18 bn. The financial crisis deeply affected traditional funding sources Debt tenors shortened and pricing increased dramatically. As a result, there has been a shift from commercial debt to public financing institutions (EIB). There is a growing dependency on public support to bring deals to close. Z h deed deed deed deee deee dddd dddd dddd ddde ddde dddd EIB PPP Financing Since 1990, EIB has progressively broadened geographic and sector spread of its PPP lending. The Bank is now one of the major funders of projects in Europe. Portfolio of 130 projects and investment of around EUR 30 billion. Annual signatures averaging above EUR 2 billion since 2000, reaching EUR 3.4 billion in 2010 with EUR 2.4 billion in the transport sector.
The European PPP Market Western Europe showed most PPP activity in 2010. EUR million 5,000 4,500 4,000 3,500 3,000 Regional PPP Distribution In 2010, most PPP activity took place in Western Europe. For the first time, Spain is the largest market by value of transactions - the UK still leads by number of deals. Portugal and France are solid performers. Eastern European markets remain weaker. Nb of deals 50 45 40 35 30 2,500 25 2,000 20 1,500 15 1,000 10 500 5 0 0 Spain United Kingdom Portugal France Belgium Sweden Netherlands Germany Italy Denmark Czech Republic Ireland Lithuania Bulgaria Total value Number
The European PPP Market Transport represents half of the market volume, though outnumbered in terms of deal numbers. Education Number of Deals by Sector 0 4 8 12 16 20 24 28 32 36 40 Healthcare 16% General Public Services 7% Public Order and Safety 3% Transport Telecoms 4% Healthcare Environment 1% General Public Services Public Order and Safety Telecoms Environment Transport 49% Education 20% PPP Financing per Sector With 38 projects in 2010, Education PPPs outnumbered Transport PPPs (24 projects). However, in terms of value, with EUR 9 million invested, transport still represents half of the market volume. Education and healthcare projects are, however, increasing.
1. The European PPP Market 2. EIB s support to PPPs 3. EIB as European Policy Partner
EIB Financing Instruments for PPP EIB has at its disposal a wide and flexible portfolio of financing instruments for PPP Standard Loans EIB lending instrument for Investment Grade operations Banks Project Finance Direct Loans Intermediated Loans Project finance with direct project risk Project SPV Structured Finance Facility For low and sub investment Grade operations LGTT (Mezzanine) Equity through Funds Innovative financing: the A5 Autobahn, Germany Widening of an existing motorway between Baden- Baden and Offenburg to six lanes drawing on EIB senior, mezzanine and equity finance.
EIB PPP Lending Counter balancing the market development during the financial crisis. in EUR millions 4,000 PPP market growth rate 80% 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 1.3% 9.1% -18.2% 16.2% 60% 40% 20% 0% -20% 3,500 3,000 2,500 2,000 1,500 1,000 500 Transport Solid Waste Services Health, Education Health Energy Education 0-35.0% 2005 2006 2007 2008 2009 2010-40% 0 2005 2006 2007 2008 2009 2010 EIB PPP lending PPP Market Growth rate EIB PPP Lending In the period 2005 to 2010, EIB supported 85 PPP projects with in total EUR 15.2 millions. EIB has generally concentrated on Europe s largest and most strategic PPPs. EIB lending has been particularly important in UK, Spain and Portugal. Sector Distribution Transport clearly is the strongest PPP sector, representing half of the market volume. Education and healthcare projects have risen considerably in the more recent past.
EIB Advisory Instruments Enhancing PPPs in Europe through technical and financial assistance EPEC - European PPP Expertise Centre strengthen the ability of the public sector to engage in Public Private Partnership (PPP) transactions by helping Members to share experience and expertise, analysis and good practice JESSICA Joint European Support for Sustainable Investment in City Areas JESSICA Innovative financing instrument for integrated urban development, launched by EU Commission (DG Regio) and supported by EIB Higher productivity of SF / public funds - use Leverage Effect and Expertise JASPERS - Joint Assistance to Support Projects in European Regions Technical assistance partnership to prepare major projects between DG REGIO, EIB and EBRD Increasing the capacity of the beneficiary countries to make the best use of EU funding
1. The European PPP Market 2. EIB s support to PPPs 3. EIB as European Policy Partner
EIB as European Policy Partner Europe 2020 Strategy smart growth Infrastructure Investment needs of EUR 1.5-2.0 trillion until 2020 EIB/Commission collaboration on: Joint financial instruments to leverage private finance Promoting grant/loan blending PPP and energy efficiency Private finance and broadband The EU2020 Project Bonds initiative Financial and technical assistance JASPERS JESSICA EPEC inclusive sustainable New sources of finance & smarter use of public resources 11