Transcript Blending PPPs with EU grants

EPEC Private Sector Forum
Blending PPPs with EU Grants
Dr Goetz von Thadden
European PPP Expertise Centre
Brussels, 2 June 2010
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Blending EU grants and PPPs?
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Cohesion funding of EUR 350bn plus TEN-T funding of EUR 8bn is a major
source of infrastructure finance.
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Although co-financing rules differ across the instruments, all require
contributions, which could come from private sources.
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They rarely do, mainly because the schemes were designed for capital
contributions (which sit uneasily with PPP models).
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The topic needs discussion now for the next programming period, when (i)
funding may be less generous – a speculation, (ii) conventional govt cofinancing more difficult to find – a certainty, (iii) leveraging has worked – see
LGTT, (iv) wider recognition of the benefits of PPP and its whole-live
approach to project design, delivery and management.
• Learning the lessons from the past to ensure regulations are
appropriate and all stakeholders are equipped and ready for 2014.
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What can EU grants bring to PPPs?
• They lower the cost for TEN investments and make
them more attractive.
• They bridge the funding gap and make environmental
projects viable.
• They support non-income generating investments for
regional development.
• Grants are to PPPs what they are to all public sector
projects ...
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What can PPPs bring to EU grants?
• Professional project management and implementation.
• Project delivery on time and on budget.
• Improved asset and service quality.
• Life-cycle approach with constant performance
throughout concession/contract period.
• Private finance helps to raise national contribution.
• Private finance leverages EU grants for better projects
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Why isn’t the EC flooded with PPP grant
applications?
• Limited public sector capacity to deliver complex
project structures.
• Organisational bottlenecks at national level.
• Lack of encouragement from EC.
• Unclear issues re state aid (beneficiary), balance
sheet treatment, procurement, cut-off date, etc. for
blending mechanisms.
• Concerted efforts are needed to start the flow
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There is only so much that EPEC can do …
• Work stream initiated on blending mechanisms.
• Dialogue with Members, relevant DGs, and private
sector.
• Bilateral support for pilot programme.
• EPEC for analysis, guidance, organisation, and
strategy at macro level.
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And then there is JASPERS at the micro level
• JASPERS supports the grant application process for
individual projects (incl. PPPs).
• JASPERS has done work on the concept of PPP/grant
blending as horizontal task.
• JASPERS gives feedback to EC arising from individual
projects (open issues).
• JASPERS has to treat PPPs like all other grant apps
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But there is homework for everybody …
• The EC has to clarify a number of open issues.
• Member states have to set up networks facilitating
PPP/grant blending (public-public partnerships).
• The private sector has to learn about possible
structures and support their development.
• PPP/grant blending needs to be pushed at all levels.
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For more information…
http://www.eib.org/epec
Goetz von Thadden
[email protected]
Tel: +352 4379 87613
Fax: +352 4379 65499
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