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  • Objectives

    The overall goal of this EFR initiative is to help infrastructure become a more accessible asset class for institutional sources of capital in Europe.

    Key to increasing accessibility of the asset class, particularly for institutional investors is greater transparency and harmonization of project pipelines, structures, financing and performance.

    In addition to increased accessibility of the asset class, there needs to be further avai-lability of best practices and benchmarking / performance data to increase the supply of projects and public and private investor confi-dence in the sector.

    The recommendations, which will be deve-loped in tandem with a number of other infrastructure initiatives such as the work of the B20 infrastructure & investment taskforce, support the important work already being done by public sector stakeholders, including Multilateral Development Banks.

    In this context, the European Commission's Investment Plan for Europe, which aims to mobilise at least EUR 315 billion in additional public and private spending in the next three years, and the envisaged Capital Markets Union, can both be important new drivers for boosting long-term investment across Europe.


    The global economy benefits from infras-tructure investment as a driver of growth. Europe requires infrastructure investments of between EUR 1.5 trillion to EUR 2.0 trillion to meet the policy goals of its Europe 2020 strategy. However, there is a substantial funding challenge as traditional lenders are under pressure from various sides to deleve-rage and reduce their balance sheets. While national governments need to increase their investment, private investment and particu-larly long-term institutional investors could play a further role.

    Further private investment is hampered by the relative inaccessibility of the asset class due to highly technical and bespoke projects and financing structures, a lack of benchmarking and performance data for the sector, and na-tional infrastructure pipelines that lack depth and are short on commercially viable projects.

    Strategic approach

    The european Financial ServiceS round Table (eFr) waS Formed in 2001. The memberS oF eFr are chairmen and chieF execuTive oFFicerS oF inTernaTional bankS or inSurerS wiTh headquarTerS in europe. eFr memberS believe ThaT a Fully inTegraTed eu Financial markeT, a Single markeT wiTh conSiSTenT ruleS and requiremenTS, combined wiTh a STrong, STable and compeTiTive european Financial ServiceS induSTry will lead To increaSed choice and beTTer value For all uSerS oF Financial ServiceS acroSS The member STaTeS oF The european union. an open and inTegraTed markeT reFlecTing The diverSiTy oF banking and inSurance buSineSS modelS will SupporT inveSTmenT and growTh, expanding The overall SoundneSS and compeTiTiveneSS oF The european economy.

    Facilitating EuropEan inFrastructurE invEstmEnt

    March 2015

  • A. Disclosure and reporting requirements:

    An industry standard template: Providing an overview of initial disclosure and reporting requirements on an initial and semi-annual basis, which should also be used for industry performance data

    aggregation and analysis (see Annex for an example of a framework for a standardised reporting

    requirement) including:

    Event-based disclosures: Non-payment of interest or principal, breach of contractual

    obligations related to all involved parties (i.e. bond covenants), illegality, default of a major

    contract counterparty, insolvency event, but also: Regulatory/policy changes, construction

    delays, significant deviation from projected costs and cash flows, sudden increase in costs (e.g.

    related to inflation) or "force majeure" that affect the economic value of the project.

    Public disclosure of compliance certificates.

    B. Debt terms and documentation:

    Having a common governing standard for infrastructure debt (loans and bonds) would go a long way in harmonizing contract terms across jurisdictions. A template prospectus/offer document

    should be developed with the disclosure requirements.

    C. Administration and arbitration:

    Project monitoring: Information on administrative responsibilities such as creditor decision-making, cash flow and collateral management.

    Arbitration mechanism: Information on any international arbitration court, collective action clauses (CACs), and potential compensation payments related to unforeseen events (such as regulatory

    changes) that negatively impact the economic viability of the (project) trust.

    D. Third party advisors:

    Setting out common standards for the engagement, liability and disclosure requirements for third party advisors such as technical advisors, consultants and auditors.

    Best Practices towards Standardisation and Harmonisation:

    in order To maximiSe markeT parTicipaTion, reduce ineFFiciency, and acceleraTe The developmenT oF inFraSTruc-Ture aS an aSSeT claSS. europe needS To develop a more STandardized and harmonized inFraSTrucTure capiTal markeT. by creaTing a common Framework For projecT due diligence and diScloSure, or pan-regional paSSporT, inFraSTrucTure inveSTing will become more acceSSible For long-Term inSTiTuTional inveSTorS. Such a STandar-dized Framework Should mainTain FlexibiliTy, To enable diFFerenT juriSdicTionS To impoSe addiTional requiremenTS where neceSSary.a Framework For STandardized inFraSTrucTure debT reporTing, documenTaTion and diScloSure would need To conTain The Following 4 key elemenTS:

    Finally, beyond diScloSure requiremenTS and debT documenTaTion, The public SecTor Should aTTempT To, where poSSible, STandardize oTher markeT characTeriSTicS Such aS iSSuing procedureS, governing lawS, SeTTlemenT, wiThholding TaxeS, accounTing STandardS eTc.

  • A. The public and private sectors should work toward meeting the recommendations made by the B20 to promote more, and efficient, investment in infrastructure1

    Reaffirm the critical importance of infrastructure in national growth plans. Establish, publish and deliver independently-assessed infrastructure pipelines. Establish a Global Infrastructure Hub. Implement leading practice procurement and approvals processes. Work towards greater promotion and protection of cross-border investment. Increase the availability of long-term financing for investment.

    B. Address legislative and regulatory policies that reduce infrastructure investment

    Review unintended consequences of regulatory and tax policies, such as the risk weighting of infrastructure investment in the Solvency II standard formula and other regulatory charges that disincentives institutional investment.

    National and international measures to support accessibility for international investors in overseas infrastructure debt markets.

    Update national regulation for insurance companies to allow a segregated "fixed income" classification for infrastructure debt (rather than as an illiquid asset under "alternatives.")

    Reinforce stable regulatory/ policy/ tax regimes for the infrastructure asset class. Sudden or frequent changes in policy with regard to the regulatory approach for a specific sector (i.e. changes financial incentives regime for renewable energy project) will reduce appetite for projects of the specific State Member.

    C. Encourage the public and private sectors to cooperate in project financing

    The use of public private partnerships should be further expanded across Member States. Levels of use vary by Member State and it would be useful for policymakers to promote effective collaborations as examples of best practice.

    Foster the complementarities (rather than competition) of the different sources of capital; identify how the participation of publicly funded institutions such as the EIB could add more value to the projects. Consider and identify public support measures the private sector currently needs in order to improve accessibility for infrastructure financing (i.e. credit enhancement, guarantee programs, role of MDBs). Member States and public entities should act to cover risks that the private sector is not willing to cover and not crowd out private capital.

    Increase the number of national projects eligible for Project Bonds Credit Enhancement (PBCE) in order to develop investor appetite for infrastructure assets.

    Identify and implement tax policies to encourage infrastructure debt investments.

    D. Promote the supply side of the infrastructure market

    Besides improving the demand side of infrastructure investments, encouraging the creation of a sufficient infrastructure project pipeline is key in order to meet rising demand.

    Investigate the drivers of the limited launch of PPPs, especially in continental Europe, and promote the usage of different partnership models.

    Provide harmonization of documentation and benchmarking data to policy-makers to improve public sector confidence in PPPs and provide a road-map for commercially viable and successful projects.

    Policy considerations on Infrastructure Investment:

    1 See the B20 Infrastructure & Investment Taskforce Policy Summary (July 2014) published ahead of the 2014 G-20 Brisbane Summit

  • ANNEXESBest Practices towards Standardisation and Harmonisation

  • ANNEX 1: Disclosure and reporting requirementsFramework for a standardised reporting requirement

    The eFr SupporTS The STandardiSing oF diScloSure and reporTing requiremenTS acroSS europe aS doing So would increaSe acceSSibiliTy oF The aSSeT claSS, parTicularly For inSTiTuTional inveSTorS, and provide greaTer TranSparency and harmonizaTion oF projecT pipelineS, STrucTureS, Financing and perFormance.

    OvErviEw FOr PrOjECT DEBT