Project Bonds (Consultation)

Dr. Götz Reichert, LL.M.

Prof. Dr. Jan S. Voßwinkel

In its consultation paper the Commission presents a model for infrastructure financing („Europe 2020 Project Bond Initiative“): Private or public-private project companies issue bonds on capital markets to finance infrastructure (“project bonds”). Limited payment guarantees or credits provided by the European Investment Bank (EIB) are to encourage private investors to buy project bonds.

cepPolicyBrief

By upgrading a rating to “investment-grade rating”, public guarantees (or credits) can lead to a situation in which investors subscribe project bonds and thus encourage the participation of private investors. The “Europe 2020 Project Bond Initiative” should therefore be strictly limited to projects within the scope of trans-European networks.

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