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Rules on the eligibility of project expenditure, using JESSICA, are the same as those on the use of Structural Funds as a whole, and also need to take account of any specific national constraints.
Apart from specific non-eligible items listed in the Regulations, such as housing in some of the Member States, JESSICA may allow for more flexible management of projects, respecting at the same time eligibility rules, provided always that the projects being supported form part of “integrated and sustainable” urban development plans.
Ineligible expenditure components might, for example, be included as part of a larger, multi-sector urban project, provided sufficient additional funding is attracted from other private or public sources to finance these ineligible components.
JESSICA funds could be targeted specifically at projects such as:
An Urban Development Fund (UDF) is a fund investing 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:
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.
A Holding Fund is a fund set up to invest in more than one UDF. Whilst a Holding Fund is not a requirement for JESSICA implementation, there are several benefits for Member States in having one:
An integrated plan for sustainable urban development comprises a system of interlinked actions which seeks to bring about a lasting improvement in the economic, physical, social and environmental conditions of a city or an area within the city.
The key to the process is “integration”, meaning that all policies, projects and proposals are considered in relation to one another. In this regard, the synergies between the elements of the plan should be such that the plan as a whole adds up to more than would the sum of the individual parts if implemented in isolation.
In many Member States, city-wide and area based development plans that have been prepared and adopted in accordance with existing planning protocols are likely to satisfy such a definition. Non-statutory plans and other policy documents approved following public consultation and appropriate community impact assessment might also provide an adequate basis for integrated urban development.
A case study on the Czech Republic can be found under the section Case Studies.
The EU Structural Funds’ legislative package for the programming period 2007 to 2013 provides the JESSICA operating framework. Operational procedures are being drawn up and will take effect once Operational Programmes have been formally agreed with the European Commission.
To qualify to use JESSICA, Member States must include an urban agenda in their Operational Programmes and, ideally, should also include a statement on the potential use of JESSICA in delivering this agenda. Member States will then need to decide what proportion of their Structural Funds they would like to channel using JESSICA.
JESSICA is not a new source of funding for Member States, but rather a new way of using existing Structural Fund grant allocations to support urban development projects.
The principal benefits are: