OECD, 7th Meeting on Public-Private Partnerships - Guy CHETRIT
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The document outlines trends and developments in the European PPP market as of 2013, noting a significant increase in market value and the number of deals closed. It highlights the involvement of institutional investors, who accounted for nearly 30% of the market, along with the ongoing challenges related to project quality and regulatory environments. The report emphasizes the importance of improved frameworks and active public sector roles to attract more investments in PPP projects.
OECD, 7th Meeting on Public-Private Partnerships - Guy CHETRIT
- 1. The European PPP market: trends and developments Guy Chetrit OECD, February 2014
- 2. Introduction Objective: • Overview of PPP market developments in Europe • Look at new trends for financing PPPs in Europe • Are institutional investors filling the gap? Dataset: • DBFOs / DBFMs (including concessions) for public services which reach financial close • Sourced from commercial databases, specialised publications, EIB and EPEC Members • Provisional data for 2013 • Far from perfect! 2
- 3. The European PPP Market in 2013: out of the crisis? 3
- 4. Headlines for 2013 • Increase in aggregate market value: EUR 16.7 billion (EUR 11.7 billion in 2012) • More deals closed: 80 transactions compared to 68 in 2012 • Average deal value at EUR 208 million (EUR 188 million in 2012) • 6 large deals (over EUR 500 million) compared to 4 in 2012 • UK, Italy and France account for two thirds of the overall market value • 14 countries closed at least one deal (compared to 9 in 2012) 4
- 5. The UK still in the lead 5
- 6. Incidence of large deals (over EUR 500 million) • Thameslink rolling stock (EUR 1.9 billion) • Royal Liverpool hospital (EUR 509 million) • BreBeMi motorway (EUR 2.3 billion) • Milan Eastern ring road (EUR 1.8 billion) A1/A6 motorway Schiphol-Amsterdam-Almere (EUR 1 billion) Phase 1 of Gebze-Izmir toll road (EUR 1.1 billion) 6
- 7. Transport and education as prime sectors Value Number of transactions 7
- 8. Overall improvements but… • Weak project pipelines and issues with project quality and regulatory environments in certain places • Important PPP policy reviews have been completed / may feed a wave of ex-post evaluation analyses • Significant institutional frameworks changes are taking place in a number of countries (e.g. Cyprus, Portugal) • Financing appears to be less of an issue (although pricing is still very high) • Institutional investors are more active lenders in more mature markets only 8
- 9. Closed PPP deals involving institutional investors • Something is happening! • 17 deals over the last two years (out of 116 PPPs closed) • In 2013, almost 30% of the market • Over EUR 1.3 billion of investors debt has been secured • Long-term debt indeed (up to 41 years) • Large share of debt financing package • Availability-pay deals • Very high country concentration • Many (very) different structures 9
- 10. Structures / initiatives involving institutional investors • Many caveats to our research… • 21 initiatives, 16 in operation, 5 in preparation (1 closed down) • Over EUR 15 billion of debt available • Four main models: • Direct lending • Credit enhancement platforms • Debt funds (asset managers) • Managed accounts and soft partnerships with banks • All seek to marry the expertise of banks (or bankers) with the capital of investors 10
- 11. Structures / initiatives involving institutional investors (2) • A wide range of products (e.g. senior debt, private placements, junior debt, credit enhancement for bonds) • Mix of greenfield and brownfield to diversify risks and build an infrastructure asset class • Varying risk appetite (construction, post-completion, availability, demand) • Typical sectors with important focus on availability-based deals • Varying degrees of sophistication and transformation into commercial bank-like debt • High geographic concentration 11
- 12. Some challenges to attract institutional investors debt • There are real issues for weaker PPP countries (financing issue remains significant) • Pipelines! • Role for the public sector: • Improve regulatory and institutional frameworks • Adjust procurement processes to attract investors • Playing a more active role in refinancing 12
- 13. European PPP Expertise Centre [email protected] www.eib.org/epec Twitter: @EpecNews Telephone: +352 4379 22022 Fax: +352 4379 65499 13
Editor's Notes
- #6: Wider deal distribution than beforeMore countries closing dealsItalyNL, significant given the size of the countryGermany: many small dealsCroatia: Zagreb airportPL: Poznan waste, combining EU funds