Subordinated financing, funded or unfunded guarantees and contingent credit lines designed to enhance the credit quality/credit rating of the senior debt. Credit enhancement may attract additional private finance from institutional investors or improve access to bank financing.
Four key benefits
Here are the benefits of our credit enhancement for project finance
Improves the credit quality/credit rating, increasing the protection of the senior debt, thus attracting additional financing.
Coverage tailored to the project needs, which can include the construction period.
We offer expertise in the financial and technical aspects of preparing a project.
The EIB’s financing is often seen as a quality stamp, helping the project attract additional investors.
Find out if financial support might be available to you
Who is eligible
Special purpose vehicles for project finance (including PPPs and concessions)
What is eligible
The credit enhancement product is designed for project finance in infrastructure projects. Project assets must be ring fenced, and their revenues and costs segregated from the promoter’s financial accounts.
Funded structures take the form of a subordinated bond/loan tranche with a defined repayment schedule sculpted in line with the senior debt repayment profile.
Unfunded structures are irrevocable and unconditional guarantees, providing a revolving first-demand guarantee facility in the form of a letter of credit or equivalent instrument.
The Bank will analyse the project eligibility, its economic and social viability, project procurement and concession agreement (if applicable), credit risks involved in the structure, and financial and legal aspects of the bond issuance. An appropriate financial infrastructure is required, including rating agency coverage (for Project Bond Credit Enhancement) and suitable legal precedents/frameworks. Maximum size around €200 million or 20% of the nominal of credit-enhanced senior bonds.