FINANCING FOR URBAN AREAS AND TERRITORIAL STRATEGIES Workshop on Integrated Territorial Investment Gerry Muscat, Brussels, 15 th March 2017 16/03/2017 European Investment Bank Group 1
EIB-CoR Urban Agenda Toolbox European Investment Bank Group 2
EIB Financing and Advice for Cities EUR 95 billion in lending across the 12 themes of the EU Urban Agenda, 2011-2015 Financing through multi-sector city framework loans, project investment, intermediated lending, urban regeneration funds and financial instruments Innovative and higher risk investment via EFSI Advice via the Advisory Hub through programs like JASPERS (ESIF-funded projects), ELENA (energy efficiency), FI Compass (financial instruments), EPEC (PPP) Contributing to 8 of the Urban Agenda Partnerships 16/03/2017 European Investment Bank Group 3
Challenge of Financing ITIs Definition and role of the ITI entity Legal authority of an ITI entity to invest, own assets, operate services, borrow Credit quality of the ITI entity Complex decision making Political conflict within the ITI Complexity of pooling / mixing resources from different budget, loan and grant channels Is the ITI investment program truly integrated, or the sum of its parts? 16/03/2017 European Investment Bank Group 4
Funding a truly integrated territorial investment programme Financing a project which is truly well planned Lending to the ITI entity ideal, but only feasible if it can borrow Lending for integrated elements eg. mobility investments under a regional transport authority Lending to the component municipalities of an ITI ensuring that each municipal investment fulfills an ITI strategy Financing via an ITI-dedicated urban development fund 16/03/2017 European Investment Bank Group 5
Investment Loan case Rouen ecoquartiers Rouen eco-quartiers Flaubert-Luceline Remediation of port/ industrial brownfields Preparation of sites for mixed residential, commercial, public space, culture, leisure uses. Emphasis on sustainable mobility, near-passive energy municipal building, geothermal heating network 6
16/03/2017 European Investment Bank Group 7
16/03/2017 European Investment Bank Group 8
Most widely used financing facility for the urban sector in Poland Often the main source of investment programme financing after EU funds Most involve ITI Example: Framework Loans in Poland Region. City EUROPEJSKI BANK INWESTYCYJNY 9 16/03/2017
Multi-sector City Loan with EFSI support Lisbon 25 year loan (EUR 50m) for: o o o flood alleviation and prevention urban regeneration infrastructure social housing First EFSI operation with a city as borrower. Market failure addressed: longterm funding matching the economic life of the project not available in Portugal 16/03/2017 European Investment Bank Group 10
25 year loan (EUR 50m) Thematic City Multi-sector Loan Bologna resilience Supports Bologna s 2016-2018 Investment Programme for small infrastructure projects Focus on Climate Action: mitigation and adaptation measures to improve resilience against earthquakes. Advisory support to help define adaptation components 16/03/2017 European Investment Bank Group 11
IFRRU 2020 Financial Instrument Portugal IFRRU 2020 Financial Instrument to support urban rehabilitation and revitalization, including the promotion of energy efficiency in housing IFRRU 2020 to blend ESIF, EIB and CEB resources and resources expected to come from financial intermediaries EIB loan to leverage self-sustaining use of ESIF resources for long-term investment and mobilizing public-private co-operation Projects to be located in priority areas in different cities where an integrated regeneration plan is in place (residential areas, city centers, historical centers, waterfront areas, formal industrial areas and brownfields) Based on previous JESSICA experience and developed on the basis of ex-ante assessment (identified market failures and financing gaps) 16/03/2017 European Investment Bank Group 12
Example of new financial instrument projects Fund of Funds for affordable housing and urban projects: Equity and quasi-equity mix of EFSI, public and private financing Social housing, student accommodation, public spaces, sport facilities, etc. 16/03/2017 European Investment Bank Group 13
Northwest Urban Investment Fund Cash and in kind In kind substituted out at project level 50m 60m Northwest Urban Investment Fund 110m Managed by EIB Framework loan 100m MANCHESTER City Council Chrysalis UDF (Merseyside) Evergreen UDF (Rest of NW) Shareholder in Evergreen, along with 15 other local authorities in the region Exhibition Centre Soapworks Additional coinvestment at project level Watson building Tratos land City Labs Chester Cordis On-lending of circa 30m to Evergreen projects Duke Street The Hub New projects for 2014-2020 Aiming to deliver job creation, new and refurbished floor space, and redevelopment of brownfield land outputs 14
First Urban EFSI Brownfield Sustainable Land-use Ginkgo Fund (EUR 120m) invests in contaminated former industrial sites remediates sites and sells the upgraded property for further real estate development Approx. 12 schemes in France and Belgium Contributes to Circular Economy by bringing back brownfield sites into economic use Use of environmentally sound, efficient and innovative techniques 14/10/2015 European Investment Bank Group 15
Partnering with promotional/municipal banks 16/03/2017 European Investment Bank Group 16
Intermediated Social Housing BGK (Poland) 30 year loan (EUR 192 m) to cofinance a national Operational Programme Refurbishment and new construction of rental social housing for low income households Intermediated through BGK, the Polish national development bank All projects must be part of integrated urban development plan Priority for urban regeneration areas 16/03/2017 European Investment Bank Group 17