The European Investment Bank and the London Development Agency signed last week a Memorandum of Understanding under the Joint European Support for Sustainable Investment in City Areas (JESSICA).JESSICA is a joint European Commission and EIB initiative, supported by the Council of Europe Development Bank.

London is the first region in the UK to start a cooperation with JESSICA. The cooperation, created last week, uses the form of Holding Fund structure entitled JESSICA Holding Fund. 

The Memorandum of Understanding, signed by Mr Simon Brooks, EIB Vice-President, and Mr Peter Rogers, Chief Executive of the London Development Agency confirms the pioneering role of London in implementing innovative structures for sustainable urban regeneration making an efficient and effective use of European Structural Funds. It follows a detailed evaluation study jointly funded by the European Commission, Directorate General for Regional Development and the EIB. 

On the occasion, Peter Rogers said: "JESSICA is a fantastic innovation.  It will match public and private sector investment with European funds to boost London's environmental infrastructure like waste processing and decentralised energy.  With the current economic downturn, having access to JESSICA's finance is more important than ever for the growth of London's businesses – and will also help move the capital toward a low carbon economy.  The London Development Agency will be working closely with the European Investment Bank to make sure we get as much value as possible from JESSICA."

Furthermore, Simon Brooks commented that the JESSICA Holding Fund for London would represent a first in a number of respects: "it will be the first JESSICA Holding Fund in the UK; the first Holding Fund to foresee funding from a third party investor; and the first Holding Fund to be sectorally focused".

Using the JESSICA mechanism, London is attempting to create a lasting legacy for EU Structural Funds, by establishing revolving financial instruments in support of the climate change agenda, through the promotion of more efficient use of energy and the development of innovative environmental technologies. It is expected that around 25% of the total 2007-2013 European Regional Development Fund programme for London will be provided in this way.


JESSICA is one of the Cohesion Policy Joint Initiatives that were developed by the European Commission to contribute to making Cohesion Policy more efficient and sustainable.

JESSICA - Joint European Support for Sustainable Investment in City Areas – is based on the cooperation established between the Commission, the EIB and the Council of Europe Development Bank and aims at supporting investment in sustainable urban development and regeneration.

This initiative, designed to increase the use of financial engineering instruments, permits that Managing Authorities use some of their Structural Funds allocations to invest in revolving funds - rather than once-off grant financing - and so 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 Cohesion Policy Joint Initiatives have their origin in the partnerships established between the European Commission, the European Investment Bank Group and other international financial institutions that joined forces to launch JASPERS (EIB, European Bank for Reconstruction and Development and KfW Bankengruppe); JEREMIE (EIF); JESSICA (EIB and Council of Europe Development Bank) and more recently JASMINE (EIB Group).

The task of the EIB, the European Union’s financing institution, is to contribute to the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. Between 2007 and 2013, some EUR 350 billion have been earmarked for EU cohesion policy, representing nearly 36% of the Union’s total budget. This puts the allocation for this finance stream ahead of the common agricultural policy for the first time.