11 December 2009
£100 Million Boost for Urban Regeneration in England's
Northwest
- The first JESSICA Holding Fund in England, outside
London
- New initiative approved and capitalised
- Expected to create/safeguard several thousand jobs
- New fund to be known as the Northwest Urban Investment
Fund
The Northwest Regional Development Agency (NWDA), European
Regional Development Fund (ERDF) and the European Investment Bank
(EIB) have today (11th December 2009) agreed to launch a new £100m
fund to finance urban development projects across the Northwest of
England. The NWDA expects these projects to create/safeguard
several thousand jobs.
Robert Hough, Chairman of the NWDA, said: “This initiative is an
opportunity for the region to put a mechanism in place that will
ensure we can prolong the benefit of our ERDF Programme. The
Northwest Urban Investment Fund will allow us to invest in
revolving funding, in addition to the normal single use
grants. This investment will be in the form of equity, loan
or guarantee. The returns from these investments can be re-used on
other projects again, and again, extending the life of our European
funding and helping us to maintain a level of physical regeneration
during the challenging economic climate.”
Paweł Samecki, European Commissioner for Regional Policy, said:
"I am delighted that the Northwest Urban Investment Fund is being
launched today. The European Regional Development Fund will grant
£50 million to the Northwest Urban Investment Fund to boost
regeneration and long-term economic development. The Fund is part
of our 'JESSICA' (Joint European Support for Sustainable Investment
in City Areas) initiative and will provide the Northwest with a
revolving source of investment that pays for itself. When loans are
re-paid, the fund is re-cycled and then re-invested. This means the
money goes much further than a one-off grant and will continue to
enhance the competitiveness of the regional economy for years to
come. I congratulate everyone involved in this innovative
scheme."
Simon Brooks, European Investment Bank Vice President
responsible for the United Kingdom said:: “This collaboration
between the EIB and the Northwest Regional Development Agency
builds on the EIB’s reinforced commitment to support SME activities
and sustainable urban regeneration in the current financial and
economic crisis. We intend to use EIB financial resources to their
full advantage, and where appropriate, to complement the investment
of European Structural Funds in the region.”
Liz Meek, chair of the European Regional Development Fund’s
Programme Monitoring Committee said: "I am delighted to welcome
today's announcement. European funding has helped to regenerate
many parts of the region over the last 15 years and this is a
guarantee that this important work will continue at a time when the
support is more needed than ever."
The Joint European Support for Sustainable Investment in City
Areas (JESSICA) initiative will be branded as the Northwest Urban
Investment Fund from 2010. Set up by the NWDA with funding from the
ERDF programme this new fund has been made possible with the
cooperation and support of the European Investment Bank (EIB).
The £100m fund includes £50m from the ERDF and the equivalent
match of £50m from the NWDA and will be managed by the EIB. The EIB
will be able to add to this holding fund in the future.
Today’s agreement between the EIB and the NWDA will be followed
by the formal procurement of the UDFs which will commence during
March 2010, with UDFs expected to be selected by the end of the
Summer 2010.
With the current challenging economic conditions it can be
difficult for urban projects to secure finance from traditional
commercial sources. This fund will provide debt, equity and
guarantee investment to support projects that will help unlock and
regenerate sustainable development in the Northwest’s urban areas
and make a difference to our towns and cities. By providing funding
support in this way, the public sector will be able to obtain a
return from the investment and reinvest the returns in future
projects, thereby creating a sustainable revolving investment
fund.
--ends--
Background notes
JESSICA will enable the NWDA to draw down matched ERDF funding
into a bank account, rather than for a specific project. This
allows the EIB to manage a fund that fits the objectives of the
ERDF Programme and the NWDA and pro-longs the life of ERDF funding
whilst also extending the range of finance available to projects in
the Northwest.
The Northwest is the second English region to set up a JESSICA
Holding Fund, following a similar agreement between the EIB and the
London Development Agency in October this year.
The NWDA and EIB signed a Memorandum of Understanding (MoU) in
February 2009. The MoU which establishes this agreement was signed
in Warrington by Simon Brooks, EIB Vice-President, and Steven
Broomhead, Chief Executive of the NWDA.
JESSICA - Joint European Support for Sustainable Investment in
City Areas – is one of the Cohesion Policy Joint Initiatives that
were developed by the European Commission to contribute to making
EU Cohesion Policy more efficient and sustainable. The JESSICA
mechanism is based on cooperation established between the
Commission, the EIB and the Council of Europe Development Bank and
supports investment in sustainable urban development and
regeneration.
This initiative, designed to increase the use of financial
engineering instruments, allows Managing Authorities to use some of
their European Structural Funds allocations to invest in revolving
funds - rather than once-off grant financing. By doing so the
Authorities can recycle financial resources in order to enhance and
accelerate investment in urban areas. These investments, which may
take the form of equity, loans and/or guarantees, are delivered to
projects via Urban Development Funds and, if required, holding
funds.
The Cohesion Policy Joint Initiatives originate from
partnerships established between the European Commission, the
European Investment Bank Group and other international financial
institutions. The four Joint Initiatives developed by the
Commission in the context of the Cohesion policy are:
JASPERS – Joint Assistance to support Projects in European
Regions (EIB, European Bank for Reconstruction and Development and
KfW Bankengruppe);
JEREMIE - Joint European Resources for Micro to Medium
Enterprises initiative (EIF);
JESSICA - Joint European Support for Sustainable Investment in
City Areas (EIB and Council of Europe Development Bank)
JASMINE - Joint Action to Support Micro-Finance Institutions in
Europe (EIB Group)
The European Investment Bank is the European Union’s long-term
financing institution and, provides long-term finance for
capital projects promoting European economic objectives. The EIB
made its first loan in the UK in 1973 and since then has lent
around €75bn for investment in the UK economy. In the years
from 2004 to 2009, the EIB financed investment in the UK totalling
some € 23.5bn - GBP 17.5 billion .
In 2009 the EIB has already lent about € 4.6bn (over GBP 4
bn) for UK projects ranging from investment helping UK
regional development, to protecting the environment, promoting
clean and secure energy sources, improving education facilities,
promoting the development of national and regional transport, and
supporting the activities of small and medium sized enterprises.
Financing in the UK accounted for over 8% of the EIB’s
overall EU lending so far in 2009.
Over the last ten years (1999-2008), the EIB has lent some GBP
2.5 billion for capital investment to encourage development in the
North West of the UK. This has included projects such as support
for research and development into glass processing technology,
construction of a chipboard factory, design development and
manufacture of vehicles, modernisation of a bus fleet, research and
development investment in some of the region's universities,
modernisation of hospitals, construction and refurbishment of
social housing, extension and renovation of electricity supplies,
and water and waste-water improvement schemes.
In 2008, the Bank lent some EUR 3.8 billion (GBP 3.6 billion)
for projects in the UK, ranging from investment helping the UK's
regions, to protecting the environment and improving national
health facilities, transport, and supporting the activities of
small and medium sized enterprises. Financing in the UK accounted
for over 7% of the EIB’s overall lending in the EU in 2008.
The Northwest Regional Development Agency (NWDA) works to
deliver economic success in England’s Northwest by building the
competitiveness of its businesses, people and places. Utilising our
technical expertise and strategic influence, we help the region’s
250,000+ businesses to develop and grow, as well as supporting
international trade and encouraging inward investment.
For further information please contact Neil Roscoe, Senior Press
Officer on 01925 400232 or mobile 07980 713282 or neil.roscoe@nwda.co.uk
EIB Press contact: Richard Willis, Press officer, +352 621555758
or willis@eib.org www.eib.org