23/08/20151 European Investment Bank EUROPEAN INVESTMENT BANK Urban Development Projects 29 th May 2009 Barbara Lemke Urban Planner Projects Directorate

23/08/20152 European 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

23/08/20153 European 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)

23/08/20154 European 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

23/08/20155 European 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)

23/08/20156 European Investment Bank 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 On average, around EUR 6 bn = 10% of the annual lending activity of the Bank

23/08/20157 European 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

23/08/20158 European 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

23/08/20159 European 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

23/08/ European 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)

23/08/ European 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)

23/08/ European Investment Bank 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.

23/08/ European 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

23/08/ European 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

23/08/ European Investment Bank PJ/COENV/URB