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Can Dutch PPP shift institutional interest to debt?
23 December 2011
The Dutch government is moving aggressively to encourage pension fund involvement in infrastructure debt. But pension fund activity is still highest in equity. By Antony Collins.
While the UK government struggles to explain how its pension funds can invest in infrastructure, the Netherlands has made substantial progress in attracting institutional capital to its PPP programme. The independent Dutch Infrastructure Fund, which runs an infrastructure fund, a PPP fund and a renewables fund, numbers domestic institutions ABP and DSM among its investors. Two domestic construction companies have now struck bilateral deals with pension funds to form ventures to invest in infrastructure assets.
The Netherlands Ministerie van Financiën, or finance ministry, and Rijkswaterstaat, part of the Dutch ministry of environment and infrastructure, have now structured the bidding for the N33 road project to include a Eu140 million stapled financing from ABP. The staple, which benefits from inflation protection from the finance ministry, is the first time that institutional infrastructure debt has been so closely integrated into a concession.
Market participants are enthusiastic about the pilot deal, though nervous...
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