The EIB now generally treats PPPs as a sub-set of project finance, even where the Bank is fully guaranteed throughout. This, and the more complex nature of PPP operations, implies a different set of working procedures and relationships compared with conventional projects.
• It can be difficult to undertake structured lending in parallel with "plain vanilla" loans, as the balance and pace of work are so different. This is not a problem for OPS and RM, where Loan Officers and Credit Analysts may either be dedicated to this type of operation or can devote a substantial part of their time to them. However, it can be a problem for the other Directorates, particularly PJ. There is also an issue that monitoring during construction, a traditional role for PJ, seems to be largely carried out by RM using the independent advice referred to above, rather than PJ resources. Post-completion, when commercial banks continue to employ technical advisers, PJ has tended to fade out of the picture.
• Suitable expertise is not available in all regions and expertise on PPPs developed in one region is not necessarily fully used elsewhere. Ad hoc solutions for this have been developed, e.g. the team from one country department was actively involved in appraising a project in another country, and staff transfers take place. The recent creation of "Centres of Expertise" within OPS is a step towards the better integration and availability of PPP and PFI expertise. However, the case for a structured-finance department has been accepted by all major commercial banks and, in one way or another, by other major IFIs, but not by the EIB.
• OPS and PJ normally set up a joint project team to consider PPPs, but the end result is separate reports from each. This almost inevitably means that there are loose ends between the two. Providing suitable safeguards can be put in place to ensure the independence of PJ's opinions, a fully integrated, combined report, would reduce the possibility of risks "slipping between the cracks".
• RM has built up a strong team to manage the project finance portfolio, which now includes all "structured loan" PPPs. After financial close, major changes, e.g. restructurings, are proposed by RM and reviewed by Ops before being submitted to the Management Committee for approval. Intermediate decisions are approved at the Director General level of the two directorates. Lower level decisions, e.g. as to waivers, are approved within RM. Formal annual credit reviews take second place to other portfolio management work, even where the Bank is on-risk, and there is only limited formal credit reporting on loans where the Bank is not yet taking project risk, especially during construction. However, since 2003, formal credit reviews have been systematically prepared by RM for all projects where the Bank is exposed to risk.
• The extent of JU involvement in PPP loans is largely a resource issue. In cases where there are commercial bank lenders or guarantors, the Bank may make use of the work done by their external lawyers, but may also take separate advice to review inter-creditor documentation, or to review project documentation, where it feels that the commercial banks' lawyers are not appropriate for this purpose.
• The EIB's filing systems are not well adapted to project finance-type loans. These generate large volumes of filing, and there is no clear policy on long-term retention. Similarly, the Bank's main IT tools were not designed to cope with the two-stage appraisal and approval process used in BAFO-based PPP procurement. However, this issue was being addressed.