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EUROPEAN INVESTMENT BANK Urban Development Projects 29th May 2009 Barbara Lemke Urban Planner Projects Directorate 02/08/2017 European Investment Bank 1 EU APPROACH TO URBAN POLICY CONTEXT Urban culture / asset as a major comparative advantage of the EU in a global economy Identification of common challenges: demographic, environmental, security, social cohesion Subsidiarity 02/08/2017 European Investment Bank 2 EU APPROACH TO URBAN POLICY OBJECTIVES Sustainable communities; avoiding urban sprawl Ensuring urban sustainability, taking advantage of existing (massive) assets: focus on urban renewal and regeneration Share experiences The LEIPZIG CHARTER (2007) 02/08/2017 European Investment Bank 3 BANK FINANCING OF URBAN PROJECTS MAIN SECTORS OF ACTIVITY Urban renewal and development (i.e. public infrastructures) Social housing (rehabilitation and new construction, with special focus on energy efficiency) Individual buildings of public interest (e.g. cultural heritage) Public transport Education and health facilities Water management and improvement of the environment, including waste treatment Utilities, including district heating & street lighting 02/08/2017 European Investment Bank 4 BANK FINANCING OF URBAN PROJECTS SECTORS OF WEAK ACTIVITY Supporting proper housing provision and eradication of slums promoting social inclusion (Technical Assistance outside EU) Regeneration of historic centers (“Medinas 2030 Initiative”) Natural disasters prevention Governance (Technical Assistance outside the EU) 02/08/2017 European Investment Bank 5 EUROPEAN INVESTEMENT BANK FINANCING OF URBAN RENEWAL/REGENERATION PROJECTS EIB Loans in the Urban Sector (Urban Transport & Urban Development) in million EUR, excluding Global Loans 2004 Investment loan 3770 59 % 5155 66 % 2181 66 % 2538 52 % 3828 54 % 17472 59 % Framework loan 2674 41 % 2679 34 % 1123 34 % 2320 48 % 3289 46 % 12084 41 % 6444 100 % 7834 100 % 3304 100 % 4858 100 % 7116 100 % 29556 100 % Total % 2005 % 2006 % 2007 % 2008 % Total % Operation type On average, around EUR 6 bn = 10% of the annual lending activity of the Bank 02/08/2017 European Investment Bank 6 EU APPROACH TO URBAN POLICY INTEGRATED URBAN PLANNING 02/08/2017 Strategy and objective-based on a sound diagnosis, integrated into its broader socio-economic context Precise definition of land use and infrastructure facilities Consideration of adequate services and equipment Assessment of environmental impacts Social impacts, including employment Global economic analysis of the operation Financial sustainability (public and private) of investment and operation Adequate governance and public consultation European Investment Bank 7 FINANCING URBAN RENEWAL AND DEVELOPMENT LARGE PROJECTS Typical projects: public infrastructure, public transport, hospitals, etc. Project promoters: SPVs Main role of public administrations: ensuring coordination Financing: 02/08/2017 Sources: budget, concessions, PPPs Loans and the issue of public debt Transaction costs in private participation European Investment Bank 8 EIB FINANCING OF URBAN RENEWAL AND DEVELOPMENT LONG-TERM LOANS TO LARGE PROJECTS Amounts, duration, conditions Adaptations for PPPs and additional requirements 02/08/2017 Objective: best use of resources, user protection Project quality Adaptation to context: legal issues, relations between partners, financial sustainability Adequate distribution of risks and rewards European Investment Bank 9 EIB FINANCING OF URBAN RENEWAL AND DEVELOPMENT DIRECT LOANS OR LOANS THROUGH INTERMEDIARIES Public intermediaries (national and regional institutions) Financial intermediaries (commercial or public banks) 02/08/2017 European Investment Bank 10 EIB FINANCING OF URBAN RENEWAL AND DEVELOPMENT MUNICIPAL FRAMEWORK LOANS Numerous schemes included in capex Multi-annual budget financing Sector specific loans: social housing, water management, etc. Conditions for success: 02/08/2017 Well-defined strategy, objectives and implementation and monitoring procedures Robust legal, planning and implementation framework Minimum critical thresholds (size of investments) Consensus (public participation) Adapted/reasonable time horizon Multi-sector integration (coordination of services) European Investment Bank 11 EIB QUALITY REQUIREMENTS FOR URBAN RENEWAL/REGENERATION PROJECTS Part of a local and/or regional strategy integrated urban renewal and regeneration plan/strategy sectoral plans integrated into the broader local and regional strategy. Integrated planning to ensure the sustainability of local urban communities: adequate technical definition, including service provision economically sound and financially sustainable socially responsible under sound governance positive impact on the environment, with particular focus on energy efficiency and sustainable transport. 02/08/2017 European Investment Bank 12 EIB FINANCING OF SOCIAL HOUSING PROJECTS ELIGIBILITY AND QUALITY CONDITIONS Policies: urban environment; social cohesion Location: Brownfield sites Greenfield sites if part of urban regeneration and/or local housing plan Investment, not maintenance Quality requirements: 02/08/2017 Well-defined strategy, objectives and procedures Robust legal context, planning and implementation structure Technical standards and services European Investment Bank 13 EIB FINANCING OF URBAN RENEWAL AND DEVELOPMENT URBAN DEVELOPMENT FUNDS JESSICA, Joint European Support for Sustainable Investment in City Areas Initiative of the European Commission (DG REGIO) launched at end of 2005, and supported by EIB and Council of Europe Development Bank Applying “financial engineering” techniques to EU Structural Funds 02/08/2017 European Investment Bank 14 PJ/COENV/URB 02/08/2017 European Investment Bank 15