€230 million in guarantees to back the private issuance of "project bonds" for infrastructure projects in the EU

MEPs approved a plan that has as main objective to attract private investment in transport, energy and information technology network projects. The scheme, that will be managed by the European Investment Bank (EIB), will allocate €230 million in guarantees to back the private issuance of "project bonds".

The European Parliament approved in its plenary session a plan with guarantees backing project bond issuing companies should make the bonds that they issue safer and more attractive to capital market investors such as pension and investment funds. In particular, €200 million will be set aside to guarantee investments in transport networks, €20 million for information and communication technology (ICT) networks and €10 million for energy connections. Recently, the Council agreed to increase in €10 billion the capital of the European Investment Bank.

Project bonds will be introduced in 2012 and 2013 to pave the way for possible wider use under the "Connecting Europe Facility" at the start of the EU's new Multiannual Financial Framework (MFF) for 2014-2020. According to MEPs, the idea is to test how the financial markets perceive them and to use the practical experience of the coming 18 months to fine-tune the initiative.

In addition, with an expected multiplier ratio of between 15 and 20, these guarantees could mobilise up to €4.6 billion in private investment. Investment needs for transport, energy and ICT infrastructure projects in Europe are estimated at €1.5 trillion for 2010-2020.