JESSICA helps to revitalise cities in Poland’s Silesia Region
Today, the European Investment Bank (EIB), in its capacity as manager of the Silesia JESSICA Holding Fund, concluded an agreement establishing an Urban Development Fund (UDF) with Bank Ochrony Środowiska (BOŚ).
Silesia is the fourth Polish region, after Wielkopolska, Westpomerania and Pomerania, in which a JESSICA UDF has been created. The UDF managed by BOŚ will invest approximately PLN 243 million (some EUR 55 million) over the next three years into urban projects located in degraded city areas in the region.
The JESSICA investment portfolio in Silesia may include projects with the following scope: revitalisation of urban areas, including post-military and post-industrial areas, regeneration of large elements of degraded or de-capitalized urban infrastructure (with particular emphasis on houses with significant historic or architectural value), and improvement of the condition of housing stock.
The Silesia Managing Authority wants to establish a JESSICA Holding Fund (HF) within the EIB with the aim of deploying EU Structural Funds for revitalisation investment in cities. The respective Funding Agreement was signed on 9 July 2010 and its main objective is to help boost cities’ competitiveness by stimulating their economic potential and multifunctional approach to the development of degraded areas.
BOŚ is a bank founded by the National Fund for Environmental Protection and Water Management and other environmental organisations. Its main activities are corporate and retail banking and the provision of services to local and central governments. BOŚ’s mission is to promote sustainable regional growth by providing long-term complementary financing, based on sound banking principles, to projects that are expected to provide solutions to vital economic or social problems, strengthen competitiveness and enhance protection of the environment. Since December 2010, BOŚ has been acting as the manager of one of the two UDFs in the Westpomerania region, with approximately PLN 65 million under management. Furthermore, on 13 October 2011 the EIB and BOŚ entered into an agreement establishing one of the two UDFs in the Pomerania region on the basis of which BOŚ is expected to invest approximately PLN 65 million worth of structural funds into urban projects located in smaller cities in the Pomerania region.
The mission of the EIB, the European Union’s bank, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investments.
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 between the Commission, the EIB and the Council of Europe Development Bank (CEB) and supports investment in sustainable urban development and regeneration.
This initiative, which is designed to increase the use of financial engineering instruments, allows Managing Authorities to use part of their European Structural Fund allocations to invest in revolving funds rather than providing one-off grant financing. By so doing, 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 first JESSICA fund in Poland was initiated in the Wielkopolska region. Holding Funds have subsequently been established in the Westpomerania, Silesia, Pomerania and Mazovia regions.