Wykorzystanie instrumentów wsparcia jakości kredytowej w finansowaniu projektów infrastrukturalnych
The Use of Credit Enhancement Facilities in the Financing of Infrastructure Projects

Summary/Abstract: Purpose – One of the consequences of the modern financial and economic crisis is the decline in infrastructure investments mainly due to less involvement of the private and the public sector in this area. In case of the public sector this is due to the budgetary constraints that have forced changes in priorities for future expenditure, as well as plans for infrastructure development. In turn, the smaller share of private sector investment in infrastructure is a result of the deterioration of the conditions of access to finance since banks play the main role in financing infrastructure projects as in response to the financial crisis they have tightened requirements for loans collateral, shortened maturities and raised interest rates. On the other hand, capital markets, especially bond markets, remain marginal as the source of financing of infrastructure projects, mainly due to the low rating of such projects, which is below the risk acceptable by institutional investors. Investment needs in infrastructure are very large and cannot be financed only with public funds even if public finances are stable and balanced. This means that it is necessary to look for new models of infrastructure financing based on private capital. One of the solutions can be the credit enhancement initiatives undertaken by the public authorities intended to debt issued in connection with the implementation of infrastructure projects. The aim of the article is to present and evaluate these forms of support on the example of the EU Project Bonds Initiative and the UK Guarantees scheme for infrastructure. Design/methodology/approach – The paper is based on literature studies, analysis of the EU legislation as well as case studies of projects supporting by credit enhancement facilities. Findings – Credit enhancement can be an effective tool to stimulate investment in infrastructure and commitment of long-term investors to such projects because it raises the rating of debt financing infrastructure projects. However, some forms of credit enhancement, e.g. EU Project Bonds Initiative, also have weaknesses reducing their effectiveness. Originality/value – The article considers important issues of financing of infrastructure projects which are of particular importance in the period of financial crisis when public funds for this purpose are limited due to the need to reduce the public debt as well as the private sector has limited access to financing sources.

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