Improved European infrastructure financing urged
Roland Berger Strategy Consultants and United Europe have urged a review of the way infrastructure spending is financed, in light of an 11% fall in government funded infrastructure spending between 2010-13.
In a report – Squaring the circle: Improving European infrastructure financing – the two note that there still remain significant hurdles to greater investor participation in funding infrastructure, particularly as they affect institutional investor involvement. These hurdles include the effects that regulations such as Basel III and Solvency II have on the investment decisions taken by banks and insurance companies.
What is required is a new funding model, based on six key tenets they add: creating a pipeline of investment grade projects; stocking the pipleline with existing infrastructure assets to kick start the market; tailoring risk/return profiles to different types of investors; maknig private infrastructure investments economically viable; establishing a robust ownership and governance model; and actively managing project risks.
To read the full report click here: Roland_Berger_Infrastructure_Finance_20150320