The European Investment Bank and the Planning Bureau of the Republic of Cyprus have signed a Memorandum of Understanding to strengthen cooperation in financing integrated sustainable urban development in Cyprus.

Arrangements for the signature of the Memorandum have been made by Mr Plutarchos Sakellaris, EIB Vice-President and Mr Andreas Moleskis, Permanent Secretary of the Planning Bureau of the Republic of Cyprus.

The Memorandum represents an intention to use the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative in Cyprus through the establishment of a JESSICA Holding Fund.

EIB Vice-President in charge of operations in Cyprus, Plutarchos Sakellaris said: “I am happy to see Cyprus joining forces with us to deploy EU Structural Funds in support of integrated and sustainable urban development projects. More and more EU Member States and Regions have decided to benefit from the innovative financial engineering mechanisms to support investments in priority urban projects. This is of particular importance in the current crisis”.

Since the end of April 2009, the EIB has established with respective national and regional authorities JESSICA Holding Funds, namely with the Wielkopolska Region (Poland), the Andalucía Region (Spain), the Republic of Lithuania, the Republic of Portugal and the Westpomeranian Region (Poland). JESSICA Holding Funds, managed by the EIB, will invest structural fund allocations in urban development funds supporting urban projects in the form of equity, loans and/or guarantees.

In addition, the EIB has signed Memoranda of Understanding relating to the creation of JESSICA Holding Funds with Member States and Regions in the following EU Member States: Bulgaria, Germany, Greece, Poland, Portugal, Spain, the Czech Republic and the United Kingdom.

At the request of the Managing Authorities the EIB has carried out country or region-specific evaluation studies in the following 16 Member States or their regions: Belgium, Bulgaria, Cyprus, the Czech Republic, France, Germany, Greece, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Spain, Sweden and the UK. These studies analyse the market gap for financial engineering instruments in support of sustainable urban development in the respective EU regions supported by EU grants in 2007-2013.

JESSICA is a joint initiative of the European Commission and the EIB, set up in cooperation with the Council of Europe Development Bank, designed to foster investment in urban areas, speed up urban regeneration and improve European cities. To be eligible for financing, projects have to form part of integrated urban development programmes that ensure their consistency and environmental quality. Today's agreement provides for a holding fund to invest, through urban development funds, in projects submitted by local authorities or under PPP structures focusing on projects of an integrated sustainable urban development nature.

The JESSICA mechanism makes it possible to channel money from the EU structural funds into projects that are attractive to private enterprises but need public financial support. Once repaid, the funds, along with the return on the investment, can be re-used to finance new urban projects.
Over the past five years the EIB has lent nearly EUR 30 billion for urban transport and urban renewal projects in a number of EU Member States, gaining broad experience in putting together and financing such projects. At the request of the promoters, the Bank will examine the possibility of lending from its own resources to projects receiving JESSICA financing.

Note to editors:


JESSICA, i.e. the Joint European Support for Sustainable Investment in City Areas, is an initiative of the Commission in cooperation with the European Investment Bank and the Council of Europe Development Bank, to promote sustainable investment and growth in urban areas. This initiative enables the EU Member States and their regions to use some of their EU Structural Fund allocations to make repayable investments in projects forming part of an integrated plan for sustainable urban development. 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.

EIB activity in Cyprus

EIB lending in Cyprus started in 1981. It was gaining volume after 1996, when the country started accession negotiations with the EU.     In these 12 years total EIB financing in Cyprus amounted to more that EUR 1.5 billion, of which almost half was after the country’s accession in 2004. In the five-year period 2004-2008, the EIB provided a total of EUR 645 million for projects in Cyprus in support of the Union’s objectives and the Bank’s priorities. 49% of total EIB financing in Cyprus in this period was for a cleaner environment and an enhanced quality of life. Flagship projects for urban environment infrastructure, notably water and wastewater collection networks, have been financed in almost all major cities, including Nicosia, Limassol, Larnaca and Pafos. 27% of total EIB lending in Cyprus in this period was for priority combined infrastructure investments, such as the development of transport, urban and public service information technology infrastructure. 20% of total EIB financing in Cyprus was in the energy sector with the construction of new combined-cycle and internal combustion power plants in Vassilikos and Dekeleia. EUR 32 million financed projects in synergy with the Cohesion and Structural Funds. The Bank works closely with the Cypriot authorities and the European Commission in respect of the programming and implementation of projects supported by the Structural and Cohesion Funds in Cyprus in order to maximise the impact of its action.

EIB key figures in 2008:

Total financing operations: 57.6bn (+21%, compared with 47.8bn in 2007) of which:

  • EU countries: 51.5bn
  • Accession countries: 3.4bn
  • Non-EU countries: 2.7bn

Total stock of financing operations as at 31 December 2008: 355bn (+ 9.2%, compared with 324.8bn in 2007)

Total raised by issuing bonds on the international markets in 2008: 59.5bn (+ 9%, compared with 54.7bn in 2007), raised via 247 issues in 18 currencies

Total stock of funds raised as at 31 December 2008: 253bn (246bn in 2007)