This paper identifies three main types of response available to public authorities:

Remedial actions within procurers' control

The existing procurement approaches are adapted to what used to be a highly competitive buyer's market. The current credit crisis implies a revision of these approaches, as

■ fully committed bids can only be obtained at a late stage of the procurement process, often not long before financial close

■ it becomes increasingly necessary to optimise the access to a currently, scarce banking market by applying a form of funding competition or "competitive book-building".

In addition, procurers have to get familiar with "mini-perm" structures, which may become the new market standard. Sharing the refinancing risk could deliver value for money but raises significant structuring issues.

Structural changes to the PPP model may also need to be considered, with shorter debt maturities and a changed risk-reward balance leading to higher project ratings.

Remedial actions within States' or Public Authorities' control

In addition to expanding already existing forms of public support to PPPs, such as grants or multilateral lending, there are two main new avenues which are being explored by several countries:

■ State guarantees, applied to project debt or project bonds (e.g. the French or Portuguese guarantee facilities).

■ Co-lending by the State, such as the Infrastructure Finance Unit of the UK Treasury.

There is evidence of strong potential demand for direct comprehensive guarantees applied to capital markets, filling the gap left by the defunct monoline model. The banking market would probably benefit more from indirect or partial guarantees.

There continues to be very limited experience of co-lending by the public sector, but this appears to be an efficient short term fix to "close the syndication gap". Its longer-term effects on the financial markets for PPPs and whether it can remain a "bridging" measure only, as expected by its promoters, has still to be confirmed.

Remedial actions facilitating the entry of new investors

There is a general consensus that the institutional capital markets are the "natural" lenders to PPPs. However, bringing institutions back to this market will require either

■ a restructuring of the PPP model to access the unwrapped market, or

■ developing an equivalent of the former monocline model to wrap "vanilla" bonds, as suggested above.