The first straight project bond to be completed under Italy’s designated new law for the instrument has successfully closed. The deal, a refinancing of a major toll road surrounding Venice, is indicative of the private sector taking bigger roles on European infrastructure-based projects, as banks worldwide are squeezed by Basel III rules.

The €830 million ($933.9 million) proceeds will be used to refinance the construction of the Passante di Mestre toll road. The transaction marks the first time both a project bond, and the European Investment Bank’s (EIB) credit enhancement tool, have been used to fund a project subject to demand-based risk – because it’s a toll road, people don’t have to use it.

“This is a significant departure for the EIB, as it’s a different risk profile to what they’ve accepted on previous PBCE [project bond...