WHAT IS JESSICA-1 ? JESSICA stands for Joint European
Support for Sustainable Investment in City Areas
JESSICA is an optional facility JESSICA offers Member States (MS)
and Managing Authorities (MA) the possibility to "transform" grants from Operational Programmes (OPs), into repayable and recyclable assistance, to PPPs and other projects for urban renewal and development
WHAT IS JESSICA-2 ? Under Jessica, MS and MAs have the
possibility to allocate and contribute resources from OPs, to:
- Urban Development Funds (UDF),- Holding Funds (HF) Urban Development Funds invest in
PPPs or projects included in Integrated Urban Development Plans
(IUDP) -art 42 bis of new SF reg. Holding Funds invest in several UDFs
WHY JESSICA?-1 Increasing investment needs for
sustainable cities and towns Available public funds are scarce -
need for private and banking sector contribution
Available administrative and technical capacity within Urban authorities, cities and towns, often does not correspond to investment needs
.
WHY JESSICA? -2 Need to use innovative financing
schemes for sustainable urban development, levering in additional loan and private resources, not increasing public debt
Need to mobilise technical, financial, managerial expertise and capacity of IFIs, banks, funds, private sector, for sustainable urban investment
JESSICA PHASESPhase 1: ProgrammingPhase 2: Implementation by
Man. Authorities- selection of funds- funding agreementsPhase 3: Funds support projectsPhase 4: Funds at the Closure of
Operational Programmes
Phase 1-Programming: INTEGRATED URBAN DEVELOPMENT PLANS (IUDPs)
IUDPs include a mix of consistent actions and projects, contributing to sustainable urban communities (SUC)
SUC should satisfy to the extent possible, the principles agreed at the Bristol ministerial meeting (December 2005)
ERDF co-finances those actions and projects within IUDP, falling within its scope of intervention
Phase 1-Programming: IUDPs in OPs The Commission will seek to
ensure that relevant OPs include urban development and renewal strategies – priority axes
Such strategies – priority axes within OPs should provide for elaborating integrated Urban Development Plans, as early as possible
Phase 1: EXPECTED EIB AND CEB CONTRIBUTION TO OPs AND IUDPs Memorandum of Understanding
between Commission-EIB-CEB on Coordinated approach to financing urban renewal and development, under preparation
Objectives:1)Involvement and contribution of EIB-
CEB to NSRF and relevant OPs, for urban renewal and development
2)Include indicative EIB-CEB loan envelops for urban development and renewal, in relevant OPs
Phase 2-Implementation by MAs: OPTION 1, OPs CONTRIBUTE TO FUNDS (UDFs) MAs of relevant OPs call for
expression of interest by UDFs, willing to invest in PPPs and other projects included in IUDPs
UDFs submit their business plan, present their shareholders, their exit policy, winding up provisions, etc
MAs evaluate and select UDFs, prepare and sign a funding agreement with each one of them
Phase 2-Impl. by MAs: OPTION 2, OPs CONTRIBUTE TO HOLDING FUNDS
Managing Authorities publish call for tender addressed to holding funds
Or, MA can award a grant to the EIB, acting as holding fund
MAs select holding fund, prepare and sign funding agreement with it
Holding fund invests in several urban development funds (UDF)
Holding Fund can provide equity, loans or guarantees to UDF
Phase 2: Funding Agreements MAs negotiate and sign funding
agreements with selected funds or holding funds
Funding agreements should:- provide for deliverables, conditions
for OP contributions, planning, monitoring implementation of JESSICA and reporting, exit policy, etc
- be flexible, allowing for initial and supplementary contributions
Phase 2: Contributions from OPs to JESSICA funds or holding funds -1Contributions from OPs to UDF
or holding funds will be irreversible for the period 2007-15
Hence, need for prudent initial and then supplementary contributions, if necessary
Phase 2: Contributions from OPs to JESSICA funds or holding funds-2 Contributions from OPs to UDF or
holding funds are eligible for interim ERDF payments
Interests or any revenue earned from OPs contributions to UDF or holding funds, must be invested in projects
Contributions from OPs to UDF or holding funds are recyclable - when paid back by supported PPPs or projects, must be reused for urban projects
JESSICA PHASE 3:Projects Supported by UDFContributions from OPs to UDFs
must be PAID at least once in the period 2007-15, OUT of UDFs, for investment in urban projects
UDF invest in PPPs or other urban projects, providing them with equity, loans or guarantees
JESSICA PHASE 3:Projects Supported by UDF
Projects supported by UDF could also receive grant assistance from OPs,
Grant assistance from OPs could finance the equity gap of projects
Supported projects fall within the ERDF /CF scope of intervention
JESSICA PHASE 3:Projects Supported by UDF Projects supported by UDF/OPs
should:- be included in an IUDP - be new projects ( greenfield or brownfield) Acquisitions or participations by UDFs
to existing and already completed projects cannot, in general, be financed by OP contributions to UDF
(UDFs cannot put OPs money in existing projects just for speculation)
Option 1, Jessica operating through funds (summary of phases 1, 2, 3)
Operational Programme
EIB and CEB,
other IFIs
UDF: Equity
Contributions from OP,Urban Authority,
Investors.Loan capital
from IFIs, Banks,
•Equity Participations in projects,
• Loans to support projects,
•Guarantees for loans to projects
Option 2, Jessica through holding funds ( summary of phases 1, 2, 3)
Operational Programme
Operational Programme
Holding Fund -
(it can be the EIB or otherspecialised Financial
Institution)
Contributions to the holding fund from OP,Urban Authority, Banks
etc.
Holding Fund -
(it can be the EIB or otherspecialised Financial
Institution)
Contributions to the holding fund from OP,Urban Authority, Banks
etc.
HF Contribute Equity, loans or guarantees
to UDFsAdditional Loans
to UDFs from EIB-IFIs-Banks
or loans to support actions for sustainable
urban development,including social housing
HF Contribute Equity, loans or guarantees
to UDFsAdditional Loans
to UDFs from EIB-IFIs-Banks
or loans to support actions for sustainable
urban development,including social housing
•Equity Participations in projects
• loans to support projects
•Guarantees
JESSICA PHASE 4: CLOSURE OF OPs - 1 At the closure of relevant OPs, at the end of 2015, contributions from OPs to UDF or HF, must have been PAID OUT of UDFs at least once, for investment in PPPs or other urban
projects included in IUDPs IF THIS IS NOT THE CASE ERDF
CONTRIBUTION TO UDFs SHOULD BE PAID BACK TO EU BUDGET
JESSICA PHASE 4: CLOSURE OF Ops - 2 OP contributions to UDFs, paid out of
the funds for investment in projects before end 2015, when paid back to the fund, before or after 2015, must be reinvested in urban projects
Funding Agreements should provide details and conditions for exit of OPs (Member States or Managing Authorities), out of UDFs or HF
ADDED VALUE OF JESSICA-1Simplification and Efficiency for MAs: JESSICA is a ready made cooperation
agreement at the service of MA MAs using the Jessica facility delegate
to professionals the management of OP funds, for urban PPPs and projects
Simpler financial management for MAs- funds contributed from OPs to urban development funds or holding funds are eligible for ERDF interim payments
ADDED VALUE OF JESSICA-2 INNOVATIONJESSICA encourages MAs and Cities -
Urban Authorities to innovate, by : using innovative and sustainable
financing schemes, mobilising key players for urban
development, to participate and work together in flexible partnerships
promoting more and better PPPs, offering better service to users, not increasing public debt
ADDED VALUE OF JESSICA-3Sustainability: recyclable
ERDF contributions to Urban Investment Funds or Holding Funds
Leverage: additional loan capital contributed by the EIB, CEB, other IFIs and financial institutions, banks, investors
ADDED VALUE OF JESSICA-4 Pooling resources: contribution of
technical and financial expertise from the IFIs and Banks, enterprises and promoters, for urban projects
Flexibility: JESSICA can support urban projects with loans, equity or guarantees, or with an appropriate mix of them, depending on the specific characteristics and needs of each project