Overviews and Activity Reports
European PPP Expertise Centre
European PPP Expertise Centre
Published in
Submitted by
Caroline Visser
Related theme(s)
Finances & Economics
Europe (EU)

Capital Markets in PPP financing – Where we were and where are we going?

This paper has been prepared by the European PPP Expertise Centre, in collaboration with Partnerships UK. It provides background information on the role of capital markets in PPP financing, and their principal advantages and disadvantages compared to traditional bank financing. It then reviews the dominant delivery model for PPP bonds, the so-called “monoline-model”, and the impact of the downgrading of the monolines’ rating following the credit crisis.The paper further analyses the reasons why capital markets have withdrawn from PPP financing, and explores potential constraints and solutions to revive and expand the role of capital markets.

Although there are active capital markets for PPPs outside Europe, notably in the USA, Cananda, and Australia, this paper covers only the European market, focusing on its two principal components, the UK market (Sterling zone) and continental Europe (Euro zone).