• The concept of the funding gap was introduced in the current Financial Perspective and the experience so far indicates that, however unintended, it makes the blending of PPPs with Structural Funds Grants difficult mainly because the exact "size" of the funding gap will often not be known until after commercial close. Therefore, it might be worth considering excluding PPPs from the application of the revenue-generating requirements for the next Financial Perspective, or redrafting the funding gap requirements in a way to make them more PPP-neutral.
• Solutions would be desirable that enable the application of EU grant funding to PPPs structured on an availability fund basis, where EU funding would need to be applied beyond the end of the cut-off period under the present regulations. This will be important to enable PPPs in areas of social infrastructure, and other low-revenue infrastructure, to benefit from EU funding without compromising the no-service-no-payment principle, and maintaining the advantages of the whole life approach.
• The lack of capacity or reduced capacity of contracting authorities at national, regional or municipal level, and in particular in the EU-12 Member States, is another reason that prevents the successful blending of PPPs and Structural Funds grants. More resources and focused technical assistance will help address this problem and necessary steps should be planned as soon as possible so that they can be taken in advance of the next Financial Perspective.
• The national, regional or municipal legislation as well as the administrative processes through which national, regional or municipal authorities must interact with each other on the one hand and with the Commission and applicable EU legislation on the other hand are not always clear, coordinated or complementary rather than supplementary. This is one of the main reasons for low levels of blended PPPs.
• The level, frequency and nature of communication with the private sector in respect of blended PPPs need to be further thought out, together with a clear message that the private sector is expected to contribute to solving issues and not only raising them. The engagement with the private sector should be of a sufficient depth and seriousness to induce confidence (level), regular so as to keep the dialogue interesting (frequency) and relevant to the problems encountered in practice so as to instigate interest.
• It would be beneficial to examine more closely the experience of the Member States in the application of national grant funding to PPPs, and how they have tackled the issues raised in this note (e.g. the cases of UK PFI credits, and German experience with PPP-grant blending).