1 JESSICA: Mainstreaming Urban Dimension JESSICA Task Force Prague, March 2009

2 JESSICA and Urban Mainstreaming 1 Urban actions are vital elements of Operational Programmes In the time of recession EU institutions support MS and regions in their recovery efforts by accelerating investments in cohesion policy programmes public resources are scarce ►need to create mechanism ensuring sustainability cities are key players to boost economy and create dynamic and competitiv environment for investments

3 What are the key problems of the european cities? Threat of demographic decline Aging population EU 27: by mln fewer year olds/ 58 mln more citizens over 65 Outmigration of young people Consequences: ►low growth potential due to the shrinking labour force ►regions in demographic decline will face difficulties in financing essential public goods and services Labour gaps The number of working age citizens will stagnate or shrink while the number of retirees explodes ►household financial power may slow ►from 2017 shrinking workforce may reduce overall employment and slow down potential growth in the EU Urban migration

4 How to respond to this situation? How to respond to this situation? In theory... Cities and regions have to make strategic and targeted investments in order to:  prevent demographic decline in some regions/cities,  make urban areas more attractive in order to stop outmigration of qualified workforce  ensure sustainable development of urban areas In practice... GO FOR JESSICA (Joint European Support for Sustainable Investment in City Areas) !

5 EUROPEAN COMMISSION Structural Funds EUROPEAN COMMISSION Structural Funds MEMBER STATE Via a designated Managing Authority MEMBER STATE Via a designated Managing Authority Holding Fund URBAN DEVELOPMENT FUND Projects forming part of an Integrated Plan for Sustainable Urban Development Grant (not repayable as long as EC Regulations adhered to) optional OTHER INVESTORS (Public & Private) OTHER INVESTORS (Public & Private) CITIES IFIs/Public Agencies/ Banks JESSICA IMPLEMENTATION MODEL Investment (equity, loan or guarantee) Contribution (repayable or non-repayable)

6 JESSICA as URBAN mainstreaming instrument and... FACING the Financial Crisis Benefits for the cities  Revolving financial instrument – sustainable investments in urban projects by the UDFs  Promotion of the PPPs, loan capital contributed by the EIB, CEB, other finantial institutions and investors  Once launched will enable exchange of experience/ knowledge networking, and thus easier implementation of JESSICA in other regions  Will promote long-term thinking as regards use of structural funds for urban investments  „Pay-back” character of JESSICA’s investments should ensure better use of structural funds Benefits for the banks  Possibility to provide lending to businesses hit by the global economic crisis by the means of revolving instrument  Managing UDFs Benefits for investors (other than banks UDF managers)  Influence on the investment portfolio  Cooperation with adequate public institutions  Remuneration for the managment of UDFs  Long term participation in the programme aiming at development of urban infrastructure of the regions

7 JESSICA in C&E Europe – state of play POLAND  JESSICA legal study completed (Analysis of Legal Conditions for the Implementation of the JESSICA Initiative in Poland)  JESSICA business study completed (Evaluation Study on the implementation of JESSICA Instruments in South/West Poland  First strategic decision has been taken by Wielkopolska Region to establish a JESSICA Holding Fund together with EIB. Zachodniopomorskie, as second region, to follow shortly.  Wide-spread interest from other regions and cities, but- “wait and see approach.

JESSICA in practice: Wielkopolska JESSICA in practice: Wielkopolska Wielkopolskie voivoidship Marshall Office - WRPO Revitalisation of city areas 40M EUR Subsidy Fund Cities with population above : Poznań, Kalisz, Konin, Ostrów Wielkopolski, Piła, Gniezno, Leszno JESSICA Fund 50M EUR Projects UDF Cities with population below Loan Equity Guarantee Repayment Projects Loan Equity Guarantee Repayment HF Measure Preparation of investment areas 10M EUR HF EIB

JESSICable projects in Poland 9 Reconstruction of ten tenement houses in Szczecin, Zachodniopomorskie ► The houses will be modernised, with ground floors changed into commercial area, first floors into offices, and the remaining floors – into apartments. Regeneration of Old Gas-Works buildings in Poznań, Wielkopolska ►tranformation of the 19th century Gas- Works into cultural centre

10 JESSICA in C&E Europe – state of play JESSICA in C&E Europe – state of play Lithuania  Great interest in JESSICA although limited amount can be invested in urban projects  JESSICA Evaluation Study for Lithuania completed  Talks with Ministry of Finance are advancing and it is expected that an urban development fund supporting energy efficiency projects in the housing sector in Lithuania will be created in the nearest future.

11 JESSICA in C&E Europe - brief overview Czech Republic JESSICA in C&E Europe - brief overview Czech Republic Moravia-Silesia Cohesion Region and the city of Ostrava are the most interested in implementing JESSICA. Further actions will focus on launching a pilot JESSICA scheme in Moravia-Silesia region JESSICA study is ongoing Several other enquiries from both public and private sectors in the Czech Republic indicating growing interest in JESSICA

12 PAN-European Brief overview JESSICA-current and anticipated operations in MS Most advanced countries/HF +UDFs to be set up Catching up countries Preliminary Interest United Kingdom Germany Italy Poland Lithuania Greece Portugal Belgium (Wallonia / Flanders) Czech Republic Bulgaria France Luxembourg Spain Sweden Cyprus Hungary (HF + UDF) Malta Romania (HF) Slovak R.