Given the complexity of PPPs in general and of blended ones in particular, the development of models, standards, and modules that can be copied and repeated would help to create a wider range of options for funding. This would have to be accompanied by training of public sector officials at national and local level, but also of the desk officers of the Commission who have previously had little exposure to PPPs.
Modifications in the new regulations should take particular account of the following:
The "project initiator" wording in the present regulation's definition of grant beneficiary should be modified to enable PPP SPVs to be grant beneficiaries. The benefits of this should be analysed further as well (e.g. VAT benefits as PPP SPVs can offset VAT payments on infrastructure against user charges, whereas public sector beneficiaries which are not VAT-registered cannot).
Mechanisms should be found to enable EU Funds to be applied to the co-financing of projects on an Availability or Service Payment basis, in addition to the present possibilities for up-front capex contributions. The key problem to solve is the application of EU funding to projects over the long-term, beyond the cut-off date of 2 years beyond the end of the programming period. A possible remedy which should be examined for the next Financial Perspective would be to allow the drawdown of Structural Funds and/or TEN-T grants into a fund or escrow account similar to the JESSICA and JEREMIE financial engineering instruments and the subsequent regular disbursement over the PPP contract period. Since such fund or escrow account would become and integrated part of the financing arrangements of a particular project, the grant could be deemed as having been paid out under the N+2 rules as soon as it reaches the fund. This mechanism would also need to permit the national contribution to be applied in line with the availability payments rather than via an up-front contribution to the account or fund. The "fonds perdu" concept underpinning present regulations would need to be reviewed in the light of such approaches, and a solution found to the question of what would happen if, after the end of the programming period, a PPP were to fail and paid out grant funds would somehow have to be left unused (e.g. they could be recycled as permitted for repayments under present financial engineering instruments).
Modifications to the funding gap approach should be considered, to remove present disincentives to structuring projects on a revenue-generating or PPP basis. It would be helpful to revisit the question as to whether, under a PPP, there is sufficient national commitment through the signature of a long-term PPP contract without the need for a national contribution as well (e.g. to enable, as in part programming periods, a project to be fully co-financed between EU grant funds and private financing under a PPP). In addition, if the funding gap approach is maintained, an alternative could be offered for beneficiaries for a lower flat percentage to be applied in circumstances, like in PPPs, in which make the funding gap approach is difficult to manage and where it would be unreasonable to refund over-financing after implementation.
Consideration should be given in the new regulations to co-financing between grant funds and loans or equity backed by financial engineering instruments, as this may be a useful approach for PPPs. The mechanism for calculating total grant equivalent should be described and the possibility for such co-financing specifically addressed and made permissible.