France props up Euro PPP market

French public-private partnerships accounted for 57% of the €9.7bn in projects that reached financial close during the first half of the year. A number of large transactions helped keep first half figures in line with the first half of 2010, but the number of deals closed dropped from 58 to 47.

“Merci beaucoup”. That’s what public-private partnership (PPP) investors should be saying to the French government, which helped keep the European PPP market afloat during the first half of the year with a raft of financial closes on several big-ticket projects, according to data from the European PPP Expertise Centre (EPEC).

France accounted for 57 percent of the €9.7 billion in projects that reached financial close during the first half of the year across Europe, including three of the four big-ticket deals that closed across the continent. The biggest project closed was the €7.8 billion Tours-Bordeaux high-speed rail concession, one of the largest European PPP deals ever closed.

Perhaps worryingly, these large projects are the main reason the value of transactions closed during the first half of the year is still roughly in line with the tally recorded in the first half of 2010. When you look at the actual number of transactions concluded, there is a sharp decrease from the 58 projects closed during the previous comparable period and this first half’s 47 deals.

Spain, which was 2010’s biggest market by size, has now been replaced by France, but the UK – despite a wave of negative publicity against the Private Finance Initiative (PFI), the country’s standardised procurement process for PPPs – is holding tight to the number two spot. In fact, when it comes to the number of transactions closed, the UK is actually Europe’s most active market. 

Portugal, which was the third-largest PPP market in 2010, has been replaced by Italy during these half year results, reflecting the Iberian nation’s almost complete withdrawal from the PPP market following its recent bailout by the European Union and the International Monetary Fund.

In total, “only eight countries closed PPP transactions over the first half of 2011,” EPEC reported. “The role of governments and public financial institutions in financing or guaranteeing PPP projects remained strong in the first half of 2011, in particular in France and Italy,” EPEC added.