Holding funds and urban development funds
A Holding Fund is set up to invest in more than one Urban Development Fund (UDF). Whilst a Holding Fund is not a requirement for JESSICA implementation, there are several benefits for Member States in having one:
- It allows managing authorities to delegate some of the tasks required in implementing JESSICA. These tasks include establishing specific criteria for making investments in UDFs, appraising and recommending appropriate UDFs to invest in, negotiating contractual arrangements with UDFs and monitoring and reporting on the performance of UDFs
- Member States with a less developed urban investment sector can still take advantage of JESSICA funding immediately, whilst UDFs and qualifying urban investment projects are being established and implemented
- Holding Funds allow for JESSICA funds to be combined with other public and private sector resources for investment in UDFs.
An Urban Development Fund (UDF invests in public-private partnerships and other projects included in an integrated plan for sustainable urban development. To be eligible for JESSICA funding, the UDF will need to demonstrate, amongst other things:
- sufficient competence and independence of management
- a comprehensive business plan and budgets for undertaking qualifying projects
- sound financial backing.
A UDF can be a separate legal entity or be established as a "separate block of finance" within an existing financial institution. In such cases, JESSICA funds need to be separately accounted for and clearly segregated from the other assets of that financial institution.
UDFs can be established at either a national, regional or local/city level in response to integrated urban development plans, project pipelines and investor interests.