Long-term financing of large-scale projects – what is hindering their implementation?
Planning security is crucial for large-scale projects in energy, digitalisation, real estate and infrastructure. This is provided by long-term loans with fixed interest rates, as the terms and investment horizons are congruent and interest rate risks for borrowers can be minimised.
Planning security is crucial for large-scale projects in energy, digitalisation, real estate and infrastructure. This is provided by long-term loans with fixed interest rates, as the terms and investment horizons are congruent and interest rate risks for borrowers can be minimised.
For the energy-efficient renovation of residential and commercial properties for example an annual investment of €438 billion is expected in the EU by 2045. Banks in the EU would therefore have to significantly expand their risk assets in order to meet this demand for loans for the realisation of large-scale projects. However, banks' equity capital may be a bottleneck for this additional demand for credit to implement decarbonisation, as there is in parallel a need for investment in the industrial, transport and energy sectors. A study by the IW calculates an annual requirement of €818.7 billion for the EU.
Due to the emerging equity gap, regulatory issues are coming into focus: How can a balanced framework for financing be achieved? How can a balance be struck between financial stability and sufficient credit supply for the high financing requirements associated with the transformation? And what role can securitisation transactions and covered bonds in particular play in this context?
Programme12:00 Light Lunch
12:30 Welcome German Pfandbrief Banks (vdp) & German Economic Institute (IW)
12:35 Prof. Michael Hüther, presentation of IW study on the challenges of long-term financing
12:50 Roundtable discussion
13:30 Wrap-up
PlaceRepresentation of the State of Hessen to the EURue Montoyer 21
1000 Brussels
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