The project finance market in Europe is in state of flux in 2012. On the one hand austerity programmes are leading to budget cutbacks and fewer projects on the infrastructure side. Reductions in renewable tariffs are hitting the green energy arena, again leading to fewer projects. But on the other hand, infrastructure is central to the calls for an economic growth agenda and with sovereign budgets tight, the use of private finance will be critical to financing new deals.
The Global Infrastructure financing market continues to present significant opportunities with new markets opening up all the time. One interesting example of the phenomena is in France and Canada. Now the large French rail deals have been awarded, Canada is upping its interest in the sector and starting to offer some new mega deals to the market. The lessons learned on the French deals is being utilised in Canada.
The Indian government estimates that US$1tr of funds are needed to meet its infrastructure development targets in the coming 12th five year development plan (2012-2017). And every year, India’s finance minister announces a budget that aims to address this and address issues on funding options. Yet, the implementation seems slow and probably more difficult than expected.
The Global Renewables market continues to be one of the more attractive in the project finance sphere as the race to develop clean energy shows little sign of abating. However as the market matures, it is going through a number of growing pains - which will be analysed fully in the PFI Renewables Report.