Project bonds are an important way of financing infrastructure from capital markets and the Government is supporting the use of project bonds for infrastructure in a number of ways.
The UK Guarantees Scheme (UKGS) helps infrastructure projects access capital market finance by enabling them to issue government-backed bonds.
The UKGS is a temporary intervention and is due to close in December 2016. The government will be engaging with industry on the future of the Scheme over the coming months.
The Government also supports the development of project bonds through the European Commission and European Investment Bank’s Project Bond Initiative. The Project Bond Credit Enhancement (PBCE) under this initiative is supporting the project bond market by improving the credit quality of senior bonds issued by project promoters through a loan or contingent facility provided by the EIB.