The SBF can be drawn by the project company in case of unexpected reductions in traffic income of the project during the initial ramp-up period of operation in order to assure service of its senior credit facilities. The SBF, funded by commercial banks, will benefit from a guarantee from the EIB and will be available for draw down in the initial operating period only (up to 7 years after the construction of the project is completed). All repayments are to be made on the outstanding amounts of the SBF on a cash sweep basis and are subordinated to the senior loans underpinned by it. If at the end of the availability period there are still amounts outstanding under the SBF (accrued interest and principal), the LGTT guarantee can be called upon by the SBF providers, the EIB would pay out the SBF providers and then become subordinated creditor to the project. Once EIB becomes a creditor to the project, amounts due under the LGTT will rank junior to the debt service of the senior credit facility and would be repaid based on the availability of cash-flow post senior debt service, on a fixed amortisation schedule or on any other agreed reimbursement arrangement.
In order to reach a larger pool of candidate projects, the EIB and the EC consider that broadening the scope of the LGTT to availability-based schemes is worth examination. This would allow targeting significant investments in the rail and inland waterway projects which are in many cases being procured as availability-payments PPPs.