Deal for Europe’s project bonds
25 May 2012
The European Union has taken the next steps in its Europe 2020 Project Bond initiative, announcing €230m in guarantees to support the plans.
In a deal between the EU and European Investment Bank (EIB), the money will be set aside to deliver new infrastructure projects across the continent, using the institutions’ good credit ratings to attract investments from institutional investors such as pension funds.It is hoped the bond initiative, which covers 2012-13, will attract investment form the private sector of up to 20 times the amount being invested by the EU, meaning the bonds could be worth €4.5bn over the year.
The money is set aside from the EU’s existing infrastructure budget, and represents a pilot phase. Projects able to access the funding will be in the transport, energy and communications sectors.
Plans for the €230m bonds were announced in October last year, with a number of projects identified for investment in April.
