Europe takes the first step towards i project bonds. Free to use 230 million euros as guarantees and loans for the issue of new securities aimed at 18-month pilot projects in infrastructure, especially in the telecommunications, energy and transport sectors.
The go-ahead came in the afternoon from a meeting of the so-called trilogue, which includes representatives of the European Parliament, the European Council and the EU Commission. Thanks to the leverage effect, the unlocked figure is able to mobilize investments of up to 4,6 billion euros.
Today's agreement refers to the resources available in the 2012-2013 EU budget, but is part of an overall plan for the release of 1.500 billion euros up to 2020. The vote on the agreement by the Parliamentary Budget Commission will arrive on 31 May , while the approval of the plenary assembly is expected for July.
Project bonds are one of the main instruments of the growth strategy which will be discussed tomorrow at the informal summit in Brussels. Despite their name, these are not traditional bonds, but instruments designed to raise public and private resources to invest in the construction of new infrastructures at European level. A task traditionally performed by banks, which however – especially in this phase – are unwilling to invest resources in projects that produce results over a long period of time, unless they raise interest rates excessively.
Thanks to the intervention of the European Investment Bank, which should take on the part with the greatest risk, the rating of the project bonds will be raised, therefore the cost of the senior loan will be reduced, which will be offered to institutional and private investors. There are also bonds with a lower risk that can be placed among small investors.
