The data analysed here come from a variety of sources, notably ProjectWare and Infrastructure Journal, cross-checked where appropriate against the European Investment Bank's (EIB) own project files. The list of projects has been validated where possible by EIB country specialists and the European PPP Expertise Centre (EPEC). The data covers the period 1990 to 2009 and does not include smaller projects with a capital value of less than EUR 5 million. Annex 1 explains in detail how the data have been aggregated and cross-checked.
The project values recorded in this paper represents the total known funding requirements at the time of financial close. Therefore, the project value equals the sum of secured debt and equity. The financial close date is understood as the date at which all project contract and financing documentation have been signed, and conditions precedent to initial drawing of the debt have been fulfilled. From this moment there is a legally binding commitment for equity holders or debt financiers to provide or mobilize funding for the project.4
The database used in this paper differs from the 2007 paper by Blanc-Brude et al. (2007) in several respects. Most importantly, the 2007 paper refers to the date of signature (pre-agreement to realize the project) while the present update only considers projects reaching financial close (project contract and financing documentation signed; see paragraph above). Moreover, we slightly adjusted the list of projects for the period 1990-2006 and eliminated a few borderline projects based on both their size (only projects equal to or larger than € 5 million are considered) and the definition of PPPs applied in this update. For the period 1990-2006, the 2007 paper included 1066 projects with a capital value of EUR 195 billion. For the same period we consider 971 projects with a capital value of EUR 184 billion. This database is supplemented by 369 projects with a capital value of EUR 70 billion for the period 2007-2009.
Several difficulties arise in compiling a comprehensive database for PPPs in Europe. First, PPPs are often treated as a sub-category of project finance deals by specialist press and by on-line commercial databases; such information sources are frequently incomplete. Deal databases track PPP projects at different stages in the project cycle from tender publication through to financial close. Non-project financed deals and project re-financings are sometimes included, but excluded under our definition.
Second, data availability on actual PPP investment is poor and incomplete. Only for the UK can one find data on annualised PPP commitment and actual cost figures allowing for comparisons with other flow variables such as aggregate public investment or GDP. In all other countries one is limited to collecting data on the total financing requirements of PPP projects at a fixed date, i.e. financial close, which is a stock variable that cannot directly be compared with flow variables.
Finally, it is difficult to asses the relative size of PPPs in the economy as a whole. In particular, data availability of total infrastructure investment at the sectoral level is limited; also the classification of PPPs as public or private investment is sometimes ambiguous. Whether a PPP is booked as public investment in national accounts differs in many cases from one year to another and across countries. For its national accounts database, Eurostat (2004) developed a consistent framework to classify PPPs as public or private investment. This reclassification of PPPs as public or private investment, however, is not publicly available.
This paper is organised as follows. Section 2 surveys PPPs by country and over time. The sectoral distribution of PPPs is considered in Section 3. In Section 4 we try to capture the macro-economic significance of PPPs by comparing it to government investment. Section 5 takes a specific look on how the composition of PPPs evolved during the recent financial crisis, both across sectors and countries. Section 6 concludes.
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4 Note that with this method, the form of finance may influence the investment value. If the PPP project is bond-financed, funds from the bond are drawn all at once, even if some funds are required only later in the construction programme. This will likely cause a loss of interest (or negative carry), as the deposit rate is often lower than the coupon on the bond. In contrast, funds from a commercial bank loan are only drawn when needed. As a result, the project company needs to borrow more in a bond-financed transaction than in a bank-financed transaction (For more details, see EPEC (2010)).