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01 March 2011

IPE: EU to target pension schemes with infrastructure bonds


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The plan, recently outlined by EU president, José Manuel Barroso, targets pension funds and insurance companies as potential capital contributors for private companies involved in infrastructure projects.


The European Commission has launched a consultation over infrastructure 'project bonds' as part of its blueprint for economic recovery to 2020. Commissioners with responsibility for transport and energy were among those involved in drafting the consultation paper. They claim the EU will need investment of €1.5bn-2bn to plug public-sector deficits in transport, energy and digital infrastructure.

It is not immediately clear why the European Commission would need to persuade investors to enter what is already a vibrant market – other than to keep private companies afloat by providing guarantees – nor whether it believes it can attract infrastructure investment into countries and sub-sectors where investors have been reluctant to enter. The Commission believes the EIB's involvement will boost lending to infrastructure after the withdrawal of banks as lenders of first resort. A Commission spokeswoman said: "The EIB brings in investors who otherwise wouldn't be involved."

Asked whether the absence of a pan-European regulatory framework for infrastructure investment would dampen appetite for the bonds, she cited the framework agreed for scientific research across. Other participants questioned a definition that "bundles infrastructure into one big mass of things that don't behave in the same way and that have different underlying dynamics.”

Full article 



© IPE International Publishers Ltd.


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