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Urban Development Funds in Europe. Ideas for implementing the JESSICA Initiative

BBSR-Online-Publikation 03/09, Eds.: BMVBS/BBSR, Febuary 2009

Cities in Europe have to master a multitude of demographic, economic, social and environmental challenges, for which there is considerable need for investment. As many cities do not have the required funds for financing this investment, a financing gap has arisen which could be at least partially filled through private investment, as well as by increasing the efficiency with which public financing is spent.

In order to more strongly mobilise private capital for investment in urban development, to increase the efficiency of public funding and to create long term financing instruments based on integrated concepts, the EU has created the possibility under the JESSICA initiative to promote and finance urban development projects using "revolving" instruments such as bonds, equity and guarantees in lieu of grants. A working group composed of the interested Member States, the European Investment Bank (EIB), the European Commission, the European Parliament, and the Council of Europe Development Bank (CEB) was established to examine and answer the open questions regarding implementation of the JESSICA initiative. The results are presented in this report.

Arbeitsgemeinschaft Prof. Nadler/FIRU (Contractor) Hochschule Albstadt, Sigmaringen
Prof. Dr. Michael Nadler (Direction), Dr. Claudia Kreuz
Forschungs- und Informationsgesellschaft für Fach- und Rechtsfragen der Raum- und Umweltplanung mbH (FIRU), Kaiserslautern
Andreas Jacob, Dr.-Ing. Hanno Ehrbeck

Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), Bonn
Dr. Peter Jakubowski

ISSN 1868-0097, urn:nbn:de:0093-ON0309R152


Table of Figures
Executive Summary

1. The JESSICA Inititive - "Joint European Support for Sustainable Investment in City Areas"
1.1 Structural policies of the EU
1.2 New financing instruments under the JESSICA initiative
1.3 Areas of application
1.4 Studies at the European level
1.5 Research questions
1.6 Research approach of the present study
1.7 Criteria for the analysis of case studies

2. Legal Framework for Implementing the JESSICA Initiative
2.1 Introduction
2.2 Legal specifications for urban development funds
2.3 Holding funds
2.4 Clarification of open legal issues
2.5 Further Proceedings

3. Case Studies with Elements of JESSICA Finance in European Urban Development Projects
3.1 United Kingdom
3.2 France
3.3 Germany
3.4 Portugal
3.5 Italy

4 JESSICA funds for financing Investments in Housing in the new EU member States
4.1 Introduction
4.2 Possible financial engineering instruments
4.3 Types of funding
4.4 Involving the private sector
4.5 Financing examples
4.6 Turnover rate of fund
4.7 Considering management costs and defaults
4.8 Interim remarks
4.9 Housing Funds in the new Member States

5. Urban Development funds - an Instrument for implementing integrated Urban Development Policy?
5.1 Integrated urban development plans
5.2 Financial business activities

Annex 1 - List of Working group Members
Annex 2 - Conclusions and Recommentations of the working Group on the implementation of the JESSICA initiative
Annex 3 - Statement of the Ministers in Charge of Urban Development on JESSICA (Ministerial Policy Paper)
Annex 4 - Final Statement by the Ministers in Charge of urban Development
Annex 5 - First COCOF-Note
Annex 6 - Second COCOF-Note

German version: Stadtentwicklungsfonds in Europa. Ideen zur Umsetzung der JESSICA-Initiative. BBSR-Online-Publikation 02/09
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