The European Investment Bank (EIB) is to lend EUR 50 million to the Municipality of Athens.
The investment programme reflects the spatial strategy of the Athens Development Plan, which is intended to promote economic development and regeneration and improve the quality of life of the city’s residents.
The proposed schemes will include small and medium-scale urban development projects, primarily in the fields of urban renewal and rehabilitation of municipal infrastructure, as well as community facilities. Projects of modest scale involving environmental protection, energy saving, health and education, and urban services will also be included where appropriate.
The Municipality of Athens is the administrative, financial and commercial centre of the country and the region. Athens is also a key cultural and tourist centre, based on its world-famous historic monuments.
The EIB loan will allow the Municipality to fund its investments at a cost that is lower than that of its traditional sources of finance, whilst the long-term nature of the loan will enable it to spread the budgetary impact over a longer period. In Greece, local authorities are expected to assume a bigger role in carrying out local infrastructure investments, favouring increased prioritisation of investments.
This is the EIB’s second financing operation for local authority investment programmes in Greece, following a EUR 20 million loan for the Municipality of Kozani earlier this year. The EIB can play an important role in financing local authorities in Greece in the future.Cities are important components of the social and economic life of the EU. About 80% of the population of the EU – or some 300 million citizens – live and work in cities or in the densely urbanised areas surrounding them.
While cities are often engines of innovation and economic growth, they are also sometimes the areas where serious problems – economic decline, unemployment, physical decay, social exclusion – may become concentrated. Pockets of deprivation may threaten the economic performance and challenge the social cohesion of even the richer cities.
Urban investment has been a priority for EU Member States for many years. The Amsterdam Summit in 1997 agreed the Amsterdam Special Action Programme (1998), which gave the EIB an explicit urban development mandate for the first time. Since the Amsterdam Special Action Programme, the role of the EIB in lending for the environment, urban development, SMEs and knowledge economy activity has grown considerably.
The EIB is providing loans and investment for sustainable cities and communities across Europe, supporting a wide range of urban development outcomes. These include revitalised city and town centres; housing renewal; metropolitan transport and airports; revitalisation of buildings and land; environmental infrastructure; social and health facilities; innovation and knowledge economy amenities; facilities for SMEs; and enterprise development.
EIB lending for sustainable urban development can take a number of forms, including direct lending to local authorities (framework loans for integrated urban development programmes and individual loans for large-scale projects), lending to development organisations of various kinds (e.g. transport, housing and urban development organisations), and lending to financial institutions which on-lend to urban development organisations and authorities. Such lending is made available by the EIB in the form of intermediated (global) loans for smaller projects through on-lending by banks (in Greece the EFG and Pancretan are currently running such facilities), leasing companies or other financial institutions.