1.33 The Government has already responded positively to the economic conditions with a number of interventions to ensure that projects are not delayed as a result of an inability to raise finance at affordable pricing.
1.34 In July 2012, the Government announced a new temporary lending programme for PPP projects to ease capacity constraints in the market.
1.35 The Government has increased capital contributions to PFI projects and phased them in during the construction period to improve affordability and ease debt capacity constraints. This has been approved on several projects in procurement.
1.36 The Government also launched the UK Guarantees programme in July 2012 in response to the changing economic context and to dramatically accelerate nationally significant infrastructure projects. Up to £40 billion in guarantees could be provided to ensure that priority projects in the infrastructure pipeline can raise the finance they need despite challenging credit market conditions. Those projects which are eligible for UK Guarantees could come from a range of sectors, including transport, utilities, energy and communications. The scheme has received 75 enquiries from project sponsors to date, of which 14 projects with a capital value of around £10 billion have been prequalified as eligible for consideration of a guarantee.
1.37 Many of these measures have a finite lifetime and so the review of PFI has needed to respond to the current financing climate, which is likely to remain challenging for an extended period, in order to develop a sustainable funding model for the medium term.