Building opportunities for investors in the EU’s Trans-European Transport Network

Ahead of elections in June, the European Parliament is expected to approve a compromise text on the revision of the EU’s Trans-European Transport Network (TEN-T) guidelines, setting the tone for a cleaner, greener and smarter mobility network that spans the EU.

At the heart of the plan is the development of high-quality transport infrastructure comprising railways, inland waterways, short sea shipping routes and roads linking urban nodes, maritime and inland ports, airports and terminals.

Once the provisional agreement between the European Parliament and Council of the European Union is finalised, new mandatory targets are expected to come into place, which will create a crucial basis for member states to set out their plans, creating clarity for investors looking invest. Several areas highlighted include:

• Passenger railway lines on the TEN-T core and extended core network will be required to allow trains to travel at 160 km/h or faster by 2040.
• Safe and secure parking areas will need to be developed along core and extended core road networks by 2040, on average every 150km. This is likely to incorporate targets for the rollout of alternative fuel infrastructure, including EV chargers and hydrogen refuelling.
• Major airports dealing with more than 12 million passengers per year, will have to be connected by long-distance rail, opening up new opportunities for more high-frequency rail links to be established.
• All 430 major cities across the TEN-T network will be required to develop Sustainable Urban Mobility Plans, aimed at promoting zero and low-emission mobility.
• Ukraine, Moldova and six Western Balkan states will be incorporated into a new transport corridor, gaining additional focus and support to develop transport infrastructure.

In practice, projects associated with the TEN-T network, including those linked to the core, extended core and comprehensive network will benefit from favourable procurement, planning and funding arrangements. This includes an effective €31.7 billion in seed capital to stimulate further investment by Member States in cross-border connections that have traditionally faced greater challenges due to the need to consider two or more countries legal systems on everything from permitting to taxation and regulation.

Given the crucial role of private sector investment in realising the completion of the TEN-T network, GIIA has been working to raise awareness and outline the needs of investors as the EU and member states consider what they can do to mobilise private capital in areas such as high-speed rail. With a new paper now being developed aimed at addressing legal risks to TEN-T infrastructure, we remain positive of the trajectory to confront the barriers to investment. Nonetheless, with the first part of the TEN-T due to be completed by 2030, the pressure to create a more conducive environment across member states remains critical.

Harvey Chandler, GIIA's Head of Policy and Public Affairs, recently commented on the EU’s plans in the European Transport Regulation Observer, outlining the need for greenfield projects connected to the TEN-T to be bankable to attract institutional capital. The high upfront capital requirements of transport infrastructure mean that due consideration must be given to the allocation of risks associated with projects, as well as allowable returns to enhance the attractiveness of greenfield investments in the sector.

GIIA’s work on this area includes bilateral and multilateral discussions with member state transport ministers, industry and the EIB, as well as through our regular dialogue with the European Commission. If you’re interested in knowing more about our work, please get in touch at: hchandler@giia.net