Project finance banks have reined in lending during the recession and new regulations enacted post-global financial crisis have further restrained debt capital, leaving many infrastructure borrowers with less favorable terms or even without terms. Nowhere is this more apparent than in Europe, where banks have long been project financiers to the world. At the end of 2012, several major fund managers launched new dedicated infrastructure debt teams out of London, betting on Europe to become the place where this long-promised area of investment comes of age.
Many predicted 2012 would be the year when institutional investors stepped up to plug infrastructure’s project finance gap, which had been created by retreating commercial banks. The prediction was that institutional money would find its way via newly created infrastructure debt funds to both financing new projects and refinancing existing infrastructure bank debt, and came after a number of such funds had