Investing in project bonds to support infrastructure development may help to return the Eurozone to growth

Although costly for public authorities, construction projects undertaken through the private finance initiative (PFI) tend to be well-managed on the private sector side, delivering predictably high returns to investors. Against this background, and despite the desire of policy-makers to invest in infrastructure, the sector is facing a severe credit crunch. Mark Hellowell argues that, while EU-backed project-bonds may offer a solution by allowing projects to be funded by institutional investors, they may undermine the very disciplines that have led to PFI’s impressive record of delivery.