European Investment Bank - Project Bond Credit Enhancement

The European Investment Bank (EIB) provides Project Bond Credit Enhancement (PBCE) in the form of a subordinated instrument—either a loan or contingent facility—to support senior project bonds issued by a project company for infrastructure projects. As a subordinated instrument, PBCE is designed to increase the credit rating of the senior bonds, not to extend the EIB’s AAA credit rating to the project.

PBCE can disburse a subordinated tranche in one of two ways:

• Funded PBCE: Loan provided to the project company from the outset.
• Unfunded PBCE: A contingent credit line that can be drawn if the cash flows generated by the project are not sufficient to ensure senior bond debt service or to cover construction cost overruns.

Targeted at projects in areas of trans-European networks of transport, energy, and broadband/information and communications technology (ICT). PBCE is available to bond-financed transactions and not to bank-financed transactions. PBCE-supported projects will need to meet EIB’s regular eligibility criteria.

Mainly European Union (EU) countries are eligible. Outside the EU, EIB support is governed by a series of mandates from the EU in support of EU development and cooperation policies in partner countries.

• Size of coverage: The maximum size of PBCE available for a single transaction will be EUR 200 million or 20 per cent of the nominal of credit enhanced senior bonds, whichever is lower.

http://www.eib.org/en/products/blending/project-bonds/index.htm