JESSICA:

1
JESSICA Mainstreaming Urban Dimension JESSICA
Task Force Prague, March 2009
2
JESSICA and Urban Mainstreaming 1

• Urban actions are vital elements of 2007-2013
  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 2050 48 mln fewer 15-64 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?

• 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
JESSICA IMPLEMENTATION MODEL
EUROPEAN COMMISSION Structural Funds
Grant (not repayable as long as EC Regulations
adhered to)
MEMBER STATE Via a designated Managing Authority
OTHER INVESTORS (Public Private)
CITIES
Holding Fund
optional
Contribution (repayable or non-repayable)
URBAN DEVELOPMENT FUND
IFIs/Public Agencies/ Banks
Investment (equity, loan or guarantee)
Projects forming part of an Integrated Plan for
Sustainable Urban Development
5
6
JESSICA as URBAN mainstreaming instrumentand...
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 JESSICAs 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 CE Europe state of playPOLAND

• 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.

7
8
JESSICA in practice Wielkopolska

• Wielkopolskievoivoidship

Marshall Office - WRPO Revitalisation of city
areas 40M EUR
Measure Preparation of investment areas 10M EUR
HF EIB
Subsidy Fund
HF
JESSICA Fund 50M EUR
UDF
Cities with population above 50 000 Poznan,
Kalisz, Konin, Ostrów Wielkopolski, Pila,
Gniezno, Leszno
Cities with population below 50 000
Loan Equity Guarantee
Repayment
Repayment
Loan Equity Guarantee
Projects
Projects
9
JESSICable projects in Poland
Regeneration of Old Gas-Works buildings in
Poznan, Wielkopolska ?tranformation of the 19th
century Gas-Works into cultural centre
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.
10
JESSICA in CE Europe state of playLithuania

• 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 CE Europe - brief overviewCzech
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