The Mayor of London, Boris Johnson, and European Commissioner for Regional Policy, Paweł Samecki, today announced that some of the poorest areas of East London will benefit from £100m of joint funding in a programme of sustainable energy projects that will create over 1,000 jobs.

The Joint European Support for Sustainable Investment in City Areas fund (JESSICA) is made up of £50 million from the European Regional Development Fund, £32 million from the London Development Agency, and £18 million from the London Waste and Recycling Board. The London Development Agency has been working with the European Investment Bank and the London Waste and Recycling Board to ensure that London becomes the first part of the UK to benefit from this initiative.

The JESSICA fund will be managed by the European Investment Bank and will finance decentralised energy, recycling and waste energy creation projects. As well as regeneration benefits the projects will promote sustainable and carbon neutral economic growth, combat climate change and help the capital towards its target of reducing London’s CO2 emissions by 60% by 2025.

The Mayor of London, Boris Johnson, said:

"This funding is hugely important to both east London and to the capital as a whole. It will provide a major jobs boost to some of Europe's most deprived areas and play a major role in the capital's work to tackle climate change, helping to stimulate a low carbon economy."

"I am pleased that the European Commission recognises that whilst London is a major world city and leading financial centre, parts of the capital face real hardship. Imaginative EU funding programmes like these can act as a catalyst to attract further investment into these areas, ensuring regeneration evolves into sustained prosperity with the vital dividend of improving our environment."

European Commissioner for Regional Policy, Paweł Samecki, said:

“The JESSICA Fund will make a significant contribution to sustainable regeneration and improved quality of life in the most deprived areas of London. Unlike a one-off grant, this fund can be re-cycled and re-invested, which means the money goes further and delivers better long-term results.”

The JESSICA Holding Fund will be managed by the European Investment Bank, using innovative new procedures to bring together grant finance from European Structural Funds, with contributions from the London Development Agency and London Waste and Recycling Board. This is the first JESSICA fund in the UK and will also allow for the contribution of publicly owned land and building assets to match European funding. The JESSICA model allows returns generated from invested funds to be reinvested and engage private sector investment and project management experience.

Simon Brooks, EIB Vice-President responsible for UK activities said:

"This collaboration between the EIB, London Development Agency and London Waste and Recycling Board spearheads the EIB’s strong commitment to supporting sustainable urban regeneration, promoting energy efficiency and cutting carbon emissions in the current financial and economic crisis. The JESSICA partnership with London will also complement other EIB-backed initiatives to improve quality of life in the city, including Crossrail and the regeneration of East London through the Olympic village.”

Notes to editors:

1.    The JESSICA Holding Fund for London will focus on two priorities. Decentralised energy infrastructure will produce electricity and heat more efficiently by locating closer to the consumer, reducing transmission loss. Waste infrastructure will increase recycling capacity and ‘waste to energy’ facilities. It will boost production of renewable energy, reduce landfill and stimulate investment in the environmental sector. Project funding will be concentrated in regeneration areas with substantial deprivation, opportunity areas that can accommodate large-scale development and existing town-centres with further development capacity, as defined in the London Plan.

2.    JESSICA is one of several joint initiatives that have been developed by the European Commission to contribute to making EU cohesion policy more efficient and sustainable. Following the signing of a memorandum of understanding last year, the London Development Agency, the London Waste and Recycling Board and the European Investment Bank have worked together to develop the JESSICA financial instrument in London. The funding agreement will be signed by the London Development Agency, the London Waste and Recycling Board and the European Investment Bank following final approval from Government.

3.    Benefits of using JESSICA funds are:

Recycling of funds - Funds invested in eligible projects can be reused for new investments, significantly enhancing their effectiveness;
Leverage – JESSICA funds can engage the private sector, leveraging further investment and gaining outside competence in project management;
Flexibility – JESSICA provides a more flexible approach, by offering equity, debt or guarantees for more  investment in sustainable urban development;
Expertise – Member States, cities and regional authorities will benefit from expertise from the banking and private sector.

4.    The European Investment Bank, the European Union’s long-tem financing institution, contributes to the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. Between 2007 and 2013, some €350 billion have been earmarked for EU cohesion policy, representing nearly 36% of the Union’s total budget.

5.    The European Regional Development Fund (ERDF) programme in London is administered by the London Development Agency's European Programmes Management Unit on behalf of the Department for Communities and Local Government. The ERDF runs in seven-year cycles and the LDA, in partnership with the Mayor and in consultation with London stakeholders, provides the framework for ERDF investment.

Between 2007 and 2013, London will benefit from €182 million (£170 million) from the ERDF, match funded by €200 million (£187 million) of national funding - total €382 million. It will also benefit from €443 million (£415 million) from the European Social Fund, match funded by the same amount of national funding. Therefore, the total including match funding will amount to nearly €1.3 billion (£1.2 billion). London attracts match funding for individual projects for the ERDF, and from the five co-financing organisations (Learning and Skills Council, Department for Work and Pensions, London Development Agency , National Offenders Management Service  and London Councils).