S&P discusses the challenges of funding Europe’s infrastructure in Global Banking and Finance Review

CaptureEurope needs infrastructure to help spur its growth – but faced with high levels of debt and policies of austerity, governments are finding it difficult to justify funding expensive projects. Writing for Global Banking and Finance Review’s latest monthly issue, Standard & Poor’s Michael Wilkins, managing director of infrastructure finance ratings, points to greater collaboration between the private and public sectors as a solution. Building on a survey of key industry experts, he notes that with the support of such collaboration, government authorities can better identify and prioritise the correct projects, while institutional investors can channel financing according to risk, cost and demand.

The obvious means for fostering this collaboration, as highlighted in S&P’s survey, is improved public-private partnerships (PPPs). Given Europe needs a more developed and flexible PPP framework, Wilkins suggests that ‘capital recycling’ – that is, the sale of existing ‘brownfield’ infrastructure assets to free up funding for new ‘greenfield’ projects – or the raising of new dedicated taxes, like those used to source the funds for London’s new Crossrail, can help.

The magazine can be viewed in full here – please turn to pages 37-39 for S&P’s article.