1. Methodologies for Assessing Social and Economic Performance in JESSICA Operations Gianni Carbonaro EIB - JESSICA and Investment Funds JESSICA Networking Platform Brussels, 28 June 2011

2. Rationale for the Study (1) 2 JESSICA can be considered as a territorial impact fund Performance Dimension 1: Achieve acceptable financial remuneration Performance Dimension 2: Achieve measurable impacts on policy-defined non-financial objectives

3. Rationale for the Study (2) 3 A UDF invests in projects included in integrated plans for sustainable urban development, i.e. such that the social and economic impact of the investment (beyond its pure financial performance) can be achieved more effectively. The key non- financial features of UDF investment are thus that investment schemes are not seen as isolated, but as part of an integrated strategy, and they need to achieve impacts on sustainable urban development. Therefore stakeholders must be capable to construct projects and project portfolios likely to produce the required social and economic impact, and need a good conceptual understanding of and practical guidelines on the most appropriate methodologies, metrics and benchmarks.

4. Objectives of the Study 4 Study aims: to meet JESSICA stakeholders demand for better understanding of how to assess non-financial value-added (=social & econ. performance) in JESSICA operations and to investigate what are the most suitable tools to assess social & econ performance and how they can be employed to prioritise, reconfigure and evaluate investments realised within the JESSICA framework. Target users: MAs, UDF Managers, Project Promoters Study findings are to be used by target users in practical investment decisions: ex-ante analysis, project prioritisation and project reconfiguration, and in building JESSICA project portfolios e.g. where high financial return projects need to be suitably combined with low-return/high–impact investment.

5. Study Tasks Study Tasks 1.Aims and Framework of Study Combine the available instruments and methodologies, logic of impact investing and specific performance assessment needs of JESSICA operations in the context of Operational Programmes. Identify how proposed structured assessment methodology can facilitate stakeholders decisions with respect to prioritising investment opportunities with respect to social and economic performance; demonstrating the merit of employing JESSICA instruments in view of market failures or inadequate provision by unassisted market mechanisms; improving the stakeholders ability to judge trade-offs between financial and social and economic performance at project and UDF level; improving the structure of the information system for investment monitoring and ex-post analysis, in line also with the applicable requirements (indicators) of the Operational Programme. 5

6. Study Tasks Study Tasks 2.Assessment Paradigms: a Critical Review Describe the specific characteristics of the existing performance assessment paradigms, such as: Cost-benefit analysis Multi-criteria analysis Value for money Spatial impact analysis Logical framework Impact investing Counterfactual methods Other paradigms. Provide a structured methodological approach on how the paradigms can be employed in practice. 6

7. Study Tasks 3.Practical Performance Assessment Templates Develop exemplary social and economic performance assessment templates tailored to suit the requirements of JESSICA operations. Propose off-the-shelf templates to standardise assessments. Proposed templates and tools should cover the full JESSICA implementation cycle, i.e. (i) ex-ante assessment and modelling implications, (ii) "real-time" assessment of output and results indicators during the phase of operation and (iii) ex-post analysis of empirical data. 7

8. Study Tasks 4.Specific Issues for in-depth Analysis Identify key externalities in assessing social & econ performance. Describe how best to coordinate impact investing metrics and Operational Programme requirements in assessment templates. Identify requirements for technical assistance and training related to social and econ performance assessment in JESSICA operations. 5.Recommended Action Plan Present a strategy to facilitate the practical use of suggested methodology in existing and prospective JESSICA operations. 8