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Extraordinary times
01 March 2010
Once one of Europe's flagship PPP markets, Spanish PPP has slowed. The government plans to deal with the legacy of early real tolls and stimulate a static market with the Extraordinary Infrastructure Development Plan. But will that be enough? By Marcus Bensasson.
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[spanish toll roads]
[project finance]
When asked to describe the state of their domestic PPP and infrastructure market, Spain's project finance bankers keep using the same word: parado, or "stationary". While the dramatic turnaround in what was once Europe's most active PPP market outside the UK is mostly due to the credit crunch and subsequent recession, the exposure of structural flaws in some of the country's early road concessions have also played their part in reducing sponsor and banker appetite for risk.
Dealflow in Spain began to drop before the credit crunch, largely because Spain had already put so much new infrastructure in place. According to law firm DLA Piper, the value of new PPP projects in Spain dropped by 71% between 2004/05 and 2005/06, from Eu10.3 billion ($14 billion) to Eu2.9 billion. However, over the past couple of years the credit crunch and subsequent recession have put a halt on a upturn in the...
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