European Investment Bank (EIB) and Bank of Scotland have agreed a £150 million (EUR 240 million) (1) scheme to enhance urban regeneration by supporting upgrades and development of social housing in the UK. EIB is the European Union's long-term lending institution. Bank of Scotland is a wholly owned subsidiary of HBOS, the banking group formed through the merger of Bank of Scotland and the Halifax Group.
The finance will be made available as loans to Registered Social Landlords (RSLs) through Bank of Scotland Housing Finance team to support medium to large-scale housing improvement programmes that are part of urban regeneration schemes, particularly in the less-developed regions. An emphasis will be given to investment to upgrade housing stock that has been transferred from local authority ownership to specially created RSLs. About 25% of homes in the UK are owned and rented out by local authorities and RSLs.
Bank of Scotland will propose projects for the facility, in accordance with criteria developed with EIB. Bank of Scotland will retain its relationships with RSLs and will be responsible for agreeing satisfactory terms with its clients.
EIB Vice-President, Peter Sedgwick said: "The facility enables EIB to pass on competitive finance to the social housing element of urban renewal programmes. This will help reduce costs and speed up improvements being carried out by RSLs. Projects selected will form part of well structured local regeneration strategies, particularly in the more deprived urban areas. The facility provides a framework for encouraging regeneration through co-ordinated programmes for improved social housing and mixed development".
Head of Housing Finance for Bank of Scotland, Ceri Richards said: "This is the first facility to be available through a UK Bank to source EIB loans to fund housing regeneration. We are in initial discussions with a number of clients and are pleased that the facility has been signed in time to offer EIB-linked finance to some of the urban stock transfers scheduled to complete in early 2002. We hope to use the £150 million in conjunction with our standard facilities to finance a portfolio of much needed urban regeneration projects across the UK."
The European Investment Bank finances capital investment furthering EU integration, in particular: regional development, trans-European networks in transport, telecoms and energy, industrial competitiveness and integration, small and medium sized enterprises, environmental protection, energy security, and health and education projects. It also operates outside the EU within the framework of the EU's co-operation external policy.
Owned by the EU Member States, the EIB raises its funds on capital markets (AAA issuer). The EIB has lent over EUR 15.6 billion over the last five years for investment in the UK. Since 1998 the Bank has lent over EUR 200 million for UK social housing projects forming part of urban renewal schemes.
(1) 1 EUR : 0.608500 GBP