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The Paris financial marketplace reaffirms its specific expertise and leading position in infrastructure finance

In the wake of its report on infrastructure finance produced in 2016, Paris EUROPLACE - the organization in charge of promoting and developing the Paris financial marketplace - organized today, with the support of the French Treasury and of various European banks and investors, the first « Paris International Infrastructure Forum ».

More than 300 participants representing investors from Europe (the UK, the Netherlands, Switzerland, Germany, Luxembourg), Asia and Africa, registered to the forum. This affluence demonstrates the deep interest for infrastructure finance and confirms that Paris is an unavoidable platform for developing and financing infrastructure projects in Europe and overseas.

Today’s forum has focused on 4 specific topics:

  • Financing climate change in the wake of the Cop 21 Paris Agreement: the need for innovation
  • Financing superfast broadband across Europe: the emergence of a new asset class?
  • Trends in infrastructure finance: when regulation fosters innovation in LT financing solutions
  • Emerging markets: how can developers/investors contribute to sustainable growth?

The various panels showed the progression of the Paris marketplace towards green financing, the exemplary development of the broadband network through concessive schemes, and the ongoing progress in regulation and legal/tax frameworks for financial institutions located in Paris.

Martin Merlin, Director FISMA, European Commission, underlined the concrete actions engaged by the European Commission to support infrastructure projects: the Juncker Plan which fostered the development of various infrastructure projects, the softening of capital requirements for insurance companies (Solvability II) and banks (expected in CRR2), and the creation of European Long Term Investment Funds.

Thierry de Longuemar, Vice President of the Asian Infrastructure Investment Bank, presented the role of this newly established development bank for infrastructure financing in Asia and commented about innovative areas where France and Europe could inspire infrastructure financing in Asia, especially project bonds. These financing sources will be highly needed for the huge investments contemplated in the One Road One Belt project in which French and European financiers and sponsors could play a major role.

Michel Sapin, French Minister of Economy and Finance, underlined in his closing remarks that "Paris has a vibrant infrastructure finance ecosystem, rooted in a long tradition of dual engineering and financial culture. I look forward to seeing the strong momentum in this sector serving the need of today’s challenges, such as deploying IT infrastructures or investing for the low carbon transition."

Based on this first successful forum, Paris EUROPLACE announces that other sectorial topics will be covered in a series of events on infrastructure finance during an “Infraweek” to be held in October 2017 in Paris.

Needs for infrastructure are extremely high with an estimated 9 trillion $ of capex worldwide per year by 2025, 2/3 of this amount in emerging countries.

France already benefits from a strong position in infrastructure investment with 3.4 bn€ for greenfield projects, 4.8 bn€ for brownfield, and 3.6 bn€ for refinancing in 2016, as mentioned by Thomas Williams, managing editor, Infranews.

During the panel on regulation was presented a dedicated survey by AFG - Association Française de la Gestion Financière (the association of asset management professionals) -, showing that total funding raised by the 60 infrastructure funds operating in France since their creation amounts to 20.3 bn€; current outstanding is 13,9 bn€ (9.1 bn€ for equity funds, 4.8 bn€ for debt funds), with 2/3 provided by insurance companies.

"Infrastructure is clearly an essential element of the global strategy of the Paris financial market place. We have in Paris a very specific history of project finance, with highly experienced banking teams, world-size investors, unrivalled sponsors in various sectors, skilled advisors and supportive public authorities." declared Michel Cojean, in charge of infrastructure finance at Paris EUROPLACE.

In addition, Jean Beunardeau, CEO, HSBC France, head of the Paris EUROPLACE working group on infrastructure finance stressed that infrastructure development is an excellent way for the financial industry to show how it can contribute to a smooth, efficient and low carbon hence sustainable functioning of the real economy, and that Paris has all what it takes to remain one of the very best place of excellence in infrastructure financing and to increase its critical mass, influence and leadership.

Next Finance March 2017



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