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19/04/23 1European Investment Bank
EUROPEAN INVESTMENT BANK
Urban Development Projects
29th May 2009
Barbara LemkeUrban Planner Projects Directorate
19/04/23 2European Investment Bank
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
19/04/23 3European Investment Bank
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)
19/04/23 4European Investment Bank
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
19/04/23 5European Investment Bank
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)
19/04/23 6European Investment Bank
EUROPEAN INVESTEMENT BANK FINANCINGOF URBAN RENEWAL/REGENERATION PROJECTS
EIB Loans in the Urban Sector (Urban Transport & Urban Development) in million EUR, excluding Global Loans
On average, around EUR 6 bn = 10% of the annual lending activity of the Bank
Operation type 2004 % 2005 % 2006 % 2007 % 2008 % Total %
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 %
Total 6444 100 % 7834 100 % 3304 100 % 4858 100 % 7116 100 % 29556 100 %
19/04/23 7European Investment Bank
EU APPROACH TO URBAN POLICY
INTEGRATED URBAN PLANNING
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
19/04/23 8European Investment Bank
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: Sources: budget, concessions, PPPs Loans and the issue of public debt Transaction costs in private participation
19/04/23 9European Investment Bank
EIB FINANCING OF URBAN RENEWAL AND DEVELOPMENT
LONG-TERM LOANS TO LARGE PROJECTS
Amounts, duration, conditions
Adaptations for PPPs and additional requirements 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
19/04/23 10European Investment Bank
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)
19/04/23 11European Investment Bank
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:
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)
19/04/23 12European Investment Bank
EIB QUALITY REQUIREMENTS FORURBAN 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.
19/04/23 13European Investment Bank
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: Well-defined strategy, objectives and procedures Robust legal context, planning and implementation structure Technical standards and services
19/04/23 14European Investment Bank
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
19/04/23 15European Investment Bank
PJ/COENV/URB