• It must fulfil the EU funding criteria (be in line with the requirements of a particular priority axis under an Operational Programme).
• It has to be attractive for a private investor potentially interested in a PPP project, either as a stand-alone project or grouped with similar projects.
• It has to have a proper timeline allowing implementation during one financial perspective, so that the procurement, negotiations and construction would fit into one programming period. Large PPP projects take a lot of time to implement, and if they are to be co-financed with EU Funds (and hence require approval of the Commission, which is also time consuming) - they should be prepared early in the relevant budgetary period. It is recommended to analyse how the additional time necessary to obtain EU Funds will impact the overall timeline of the PPP project. Are the advantages of such a method of financing higher than the disadvantages and the value of lost time? Those questions have to be answered separately for each project, taking into account financial, economic and social costs and benefits.
• It cannot be too advanced. There are several rules relating to EU Funds (e.g. procurement requirements, project promotion requirements) that must be complied with, in order to receive the EU Funds. The risk of procedural problems should be mitigated to assure the payment of funds.
• A financial analysis and a CBA supplemented by a quantitative risk analysis (public sector comparator / Value for Money analysis) have to support this form of financing as the best solution for the project. One should bear in mind that a feasibility study, CBA and environmental assessment are necessary for EU co-financing, while a public sector comparator / Value for Money analysis forms the basis for a decision on whether to carry out the project as PPP; the Value for Money analysis should take into consideration the blended PPP option if there is a possibility of obtaining EU Funds for the project.
• The project can take advantage of existing policy commitment to public sector efficiency through private sector involvement for services and/or a major investment program requiring grant support to achieve affordability.
• In the case of revenue-generating projects, these projects have inherently a lower level of grant funding but are not inherently less suitable for blending, although even with EU grant funding they will still require some national grant contribution to the funding gap.