Project finance (or PF) was, is & will likely be an extremely popular way of attracting funds for infrastructure projects in the EU. Public-Private Partnership (PPP) in France is widely used to finance social infrastructure projects. PPP in Germany is also a common scheme for raising funds for the construction of social infrastructure facilities (suffice it to recall Partnerschaften Deutschland). Project finance in Italy was given a strong impetus after the conclusion of a € 600 million deal to build the Strada dei Parchi highway.
After the 2008 financial meltdown, project finance in Eastern Europe has also been experiencing explosive growth. Several large PPP projects have recently been launched in Turkey, Poland, Romania & Moldova.
Project finance in the Middle East is also an attractive option for investors. This is due to the fact that Middle Eastern banks are ready to assume all the risks associated with the implementation of PPP projects.
Closing a Project Finance Deal in America
2010 saw a sharp decline in the number of project finance deals in South America. The majority of deals were concluded in the energy sector, and that’s where Brazil was an undisputed leader. At the moment, South America is an attractive region for PPP investment. Currently, several major investment projects are being implemented in Brazil, Mexico, Puerto Rico, Chile, Peru & Colombia .
In the United States, the Long Beach Courthouse project was the first project to be funded with PPP. The recent boom in the bond market in the US and Canada is a sign of the growing interest of investors in long-term PPP projects in the United States.
Concluding a Project Finance Deal in Asia
The recent years have seen an increase in the number of Project Finance deals in Asia. The undisputed leader here is India whose government is investing heavily in the implementation of railway projects. The Philippine government has recently set up a PPP Center & is using PPP to fund projects in the transport sector.
Australia continues to be one of the most attractive PPP markets for investors. The government of this country has succeeded in attracting a number of foreign banks for the implementation of large-scale PPP projects in Australia.
Conclusion of Project Finance Deals Abroad: Key Things to Remember
The major problem investors seeking to invest in a project abroad face is which investment scheme they should choose. Some of the most popular ones include:
- creating a JV abroad;
- establishing a partnership in a foreign jurisdiction;
- registering a limited partnership in European countries;
- registering an LLC abroad.
Which structure investors will choose will ultimately depend on the legal, tax, accounting & regulatory issues they will encounter in their countries & in the country where a project is going to be implemented.
Seeking to launch a finance project in the EU or US? Need advice on project finance regulation in the EU or US? Why not contact IQ Decision UK?