JESSICA State of play across the EU EIB implementation experience Christos Kontogeorgos Head of Holding Funds and Advisory Central & Southeast Europe JESSICA and Investment Funds European Investment Bank Prague, 21 June 2011
JESSICA Joint initiative of EC and EIB since 2006, supported by CEB Support the establishment of a system of Urban Development Funds (UDFs) across the EU Utilizing resources of EU Structural Funds through financial engineering instruments UDF as an impact fund for territorial transformation Policy-driven, geographically-focused and planning-led investmentvehicle supporting the sustainable transformation processes of city areas 2
Why the JESSICA Initiative? More efficient and effective utilisation of Structural Funds through tailor made non-grant financial instruments, thus creating stronger incentives for successful project implementation Mobilization of additional financial resources for urban development projects and PPPs with a focus on sustainability/recyclability Utilisation of financial and managerial expertise from international financial institutions, such as EIB 3
What types of projects can be financed? (indicative list) Rehabilitation of brownfield areas Basic urban infrastructure Public networks (transport, water & wastewater, energy) Infrastructure for the development of entrepreneurship (techparks, clusters) Health/education (hospitals, universities, R&D) Tourism (hotels, leisure facilities) Restoration of historical buildings Cultural and multi-use recreational complexes Projects non-profitable socially and economically Objective in private sector Financial profitability UDF potential investment area Projects non-profitable financially UDF potential investment area Grant area Social-economic profitability Objective in public sector JESSICA will enable investments in projects which cannot be implemented on a strictly commercial terms or through grants
EIB role within JESSICA initiative Advising and assisting national, regional and local authorities in JESSICA implementation Evaluation studies Promoting the use of UDFs and best practice across Europe Acting as a Holding Fund manager, when requested by Member States or Managing Authorities Managing contributions from Operational Programmes on behalf of MAs; Arranging selection, establishment and investments into UDFs, which subsequently invest in Urban Projects eligible under the OPs 5
Supporting stakeholders: Evaluation studies EC/EIB JESSICA Evaluation Studies OP specific studies : Assess feasibility in the context of ERDF OPs & pre-identify projects, develop JESSICA structure in specific operational context of (pilot) city, region or Member State Horizontal (thematic) studies : Provide horizontal assistance and direction in the development and implementation of JESSICA instruments HF Handbook, UDF typologies & governance structures completed UDF Handbook, Energy-focused UDFs initiated in 2010 2 further horizontal studies (focused on non-financial impact of JESSICA and JESSICA in housing) launched in March 2011 Total of 62 studies launched over 22 Member States 6
Supporting stakeholders: Acting as HF manager 1. HF establishment Signature, Investment Board set-up, transfer of funds from Managing Authority to HF 2. Preparatory phase Market-testing, promotion, support to cities & regions in developing Jessicable projects Monitoring and reporting procedures 3. Call for Expression of Interest 4. Evaluation of Business Plans UDF selection 5. Negotiation and signature of Operational Agreements with UDFs 6. HF investment into UDFs, monitoring of UDFs 7
JESSICA implementation model EU Level European Commission National /or regional Level National/regio nal /Local Level Urban Development Funds (UDFs) Managing Authority Holding Fund (HF) HF Manager HF Regional /Local Level Projects Integrated Urban Development Plan 8
JESSICA - flow of funds Investment account Investment account Mgtfees Holding Fund OPERATIONAL AGREEMENT UDF INVESTMENT AGREEMENT Urban Projects Repayment account Contingent fee Repayment account 9
EIB Holding Funds implementation progress 15 Holding Funds (HFs) Covering 43 NUTS 2 regions 2009 : 8 EIB HFs; EUR 911m committed 2010 : 15 EIB HFs; EUR 1.5bn committed Around 1/3 directed towards sustainable energy investments 2011 : Further mandates expected over coming months Steady implementation of all HF mandates 10
EIB JESSICAHolding Funds (2009-2010) EIB Holding Fund mandate Managing Authority Volume (EUR m) HF FA HF -Wielkopolska (PL) 67 II/09 HF -Andalucía (ES) 86 II/09 HF -Lithuania (LT) 227 II/09 HF -Portugal (PT) 130 III/09 HF -Westpomerania(PL) 33 III/09 HF -London (UK) 110 IV/09 HF -NorthWest England (UK) 110 IV/09 HF -Sicily (IT) 148 IV/09 HF -Moravia Silesia (CZ) 20 I/10 HF -Campania (IT) 100 I/10 HF -Scotland (UK) 55 II/10 HF -Greece (GR) 258 III/10 HF -Silesia (PL) 60 III/10 HF -Pomerania (PL) 57 III/10 HF -Bulgaria (BG) 33 III/10 Total signed by 2010 1,494 Implementation progress 0 1 2 3 4 5 6 Key implementation stages: 0 1 2 3 4 Pre-negotiation Stage/ HF Agreement to be signed HF Agreement signed/ Investment strategy/ Investment board Call(s) for Expression of Interest in preparation Call(s) for Expression of Interest launched Call(s) for Expression of Interest closed 5 UDF(s) selected 6 Operational agreements in place (HF/ UDF) Achieved Imminent Signature expected in coming months
EIB JESSICAHolding Funds (2011) EIB Holding Fund mandate Implementation progress Key implementation stages: Managing Authority Volume (EUR m) HF FA 0 1 2 3 4 5 6 0 1 Pre-negotiation Stage/ HF Agreement to be signed HF Agreement signed/ Investment strategy/ Investment board HF -Energy Efficiency (ES) * 128 II/11 HF -Galicia (ES) 15 II/11 HF -Sardegna (IT) 70 II/11 HF -Masovia (PL) 40 III/11 2 3 4 Call(s) for Expression of Interest in preparation Call(s) for Expression of Interest launched Call(s) for Expression of Interest closed HF -Abruzzo (IT) 25 III/11 HF - West Netherlands 15 III/11 5 UDF(s) selected 6 Operational agreements in place (HF/ UDF) Total expected 2011 293 Achieved Im minent Signature expected in coming months
EIB UDFs implementation progress Urban Development Funds (UDFs) 10 UDF lots signed : Wielkopolska-PL (1), Westpomerania-PL (2), Lithuania (4), Andalucia-ES (2), London-UK (1) 7 further UDF selections completed : London-UK (1), Northwest England-UK (1), Portugal (3), Scotland-UK (1), Sicily-IT (1) UDF selections under 6 HFs currently underway : Moravia- Silesia-CZ, Pomerania-PL, Silesia-PL, Bulgaria, Greece, Sicily-IT 13
UDF s investment focus Managing Authority Volume (EUR) Investment focus/main area of activity HF -Wielkopolska (PL) 67 Revitalisation of problem areas / Business enhancement institutions in urban areas HF -Andalucía (ES) 86 Urban regeneration (tourism, culture / sports, housing) HF -Lithuania (LT) 227 Energy efficiency (EE) in housing HF -Portugal (PT) 130 Urban regeneration and EE HF Westpomerania(PL) 33 Urban regeneration / Urban infrastructure / Revitalisation of Szczecin HF -London (UK) 110 Waste / EE in urban infrastructure HF -NorthWest England (UK) 110 Urban regeneration HF -Sicily (IT) 148 Area-based development and EE HF -Moravia Silesia (CZ) 20 Brownfield revitalisation HF -Campania (IT) 100 Urban regeneration HF -Scotland (UK) 55 Urban regneration, workspace creation, EE HF -Greece (GR) 258 Urban regeneration, solid waste manageent HF -Silesia (PL) 60 Brownfield and city regeneration HF -Pomerania (PL) 57 Brownfield and city regeneration, public transport, energy infrastructure, EE HF -Bulgaria (BG) 33 Urban regeneration and energy Total signed by 2010 1,494
UDFs as urban impact funds: Main types Urban regeneration funds (mainly area based) Place making locations / incubators / creative class attractors Brownfield locations, mostly in inner city areas Deprived city districts, urban sprawl voids Energy focused funds (regional or city based) EE/RE and energy / emission audit / certification systems Climate action strategies (EU 20/20/20 targets in urban areas) Regional upgrade of green technology and transmission systems City infrastructure transformation funds (for city systems) -Addressing infra /urban imbalances from changes in city hierarchy -Focusing on the provision of capital in less competitive areas -Focusing on transformation of strategic urban infrastructure -IT, broad-band, waste to energy, water, electric public transport, etc. 15
UDFs as urban impact funds: Examples Urban regeneration funds (mainly area based) Moravia-Silesia* Northwest England* Wales (no HF) Wielkopolska Silesia* Campania* City infrastructure transformation funds (for city systems) London (Waste fund) Wielkopolska (partly focus on business environment) Energy focused funds (regional or city based) Estonia (without EIB) Lithuania London (energy efficiency fund)* Spain (under negotiation) Galicia (under negotiation) Mixed Portugal* Greece* Bulgaria* Westpomerania Pomerania* Scotland* Andalucía Sicily* * OAs not signed yet classification based on HF investment strategy 16
JESSICA status in Central and South- East Europe
Current JESSICA status in Poland HF Wielkopolska (EUR 67m) First JESSICA HF managed by EIB (April 2009) Bank Gospodarstwa Krajowego selected as UDF, Operational Agreement signed September 2010 (PLN 293 million) First project investments made HF Westpomerania (EUR 33m) Selection of UDFs finalized, Bank Zachodni WBK and Bank Ochrony Srodowiska selected as UDFs, OAs signed HF Pomerania (EUR 57m) HF Silesia (EUR 60m) Both signed in July 2010, Calls for EoI for UDFs launched HF Mazovia FA negotiations in a final stage 18
Current JESSICA status in Czech Republic HF Moravia-Silesia (EUR 20 million) Call for EoI closed: Four candidates successfully completed 1st stage (KB a.s, CMZRB a.s., Contera Management s.r.o. and Avestus Real Estate s.r.o.) UDF selection in progress OA negotiations with successful bidders June / July 2011 South-East Evaluation Study finalised and published Possible EIB support in setting up a UDF for Brno Central Moravia Evaluation Study finalised and published Possible EIB support North-East Evaluation Study finalised 19
Current JESSICA Status in Hungary/Slovenia and Slovakia Hungary - Evaluation Study launched -Parallel discussion with MA on the JESSICA implementation structure Slovenia -Evaluation Study to be launched in the near future Slovakia -Evaluation Study finalised -JESSICA implementation in the preparatory phase
Current JESSICA Status in Greece & Bulgaria Completion of preimplementation phase Funding Agreement between the EIB and the Member State signed Creation of JESSICA Holding Fund as a separate block of finance within EIB Appointment of an Investment Board Launch of a Call for EoI for the selection of UDFs Closure of Call for EoI for the selection of UDFs beginning of the assessment of offers Greece Bulgaria 1/7/2010 29/7/2010 18/3/2011 31/3/2011 21
Geographical distribution of resources - Bulgaria Total amount EUR 31.3 m allocated from Operational Program Regional Development. Resources will be earmarked to 7 biggest cities of Bulgaria as follows: 12.5 m for Urban Projects in Sofia 18.8 mil for Urban Projects in the 6 major cities of Bulgaria
Geographical distribution of resources - Greece 20 mil 15 mil 15 mil 20 mil 40 mil 10 mil 15 mil 28 mil 50 mil 10 mil 10 mil Total amount EUR 258 m, allocated among: Five Regional Operational Programs One Sectoral Operational Program 13 Priority axes in total 15 mil 23
Contacts JESSICA and Investment Funds Division European Investment Bank 100 Blvd. Konrad Adenauer, L-2950 Luxembourg www.eib.org/jessica 24