Matthias Kollatz-Ahnen, European Investment Bank Vice-President responsible for the JESSICA programme, and Rosen Plevneliev, Bulgaria’s Minister for Regional Development and Public Works, today signed an agreement in Sofia establishing a JESSICA Holding Fund. This will focus on revenue-generating, urban development projects, including the rehabilitation of deprived urban areas in seven big cities across the country. The EUR 33 million fund, including EUR 28 million from the European Regional Development Fund (ERDF), is complemented by EUR 5 million of Bulgarian national co-financing.  It will allow the implementation of Bulgaria’s 2007-2013 Regional Development Operational Programme, which has a strong urban development focus.

The Holding Fund is a fund of funds created in the framework of JESSICA (Joint European Support for Sustainable Investment in City Areas), a joint initiative of the European Commission and the European Investment Bank. As opposed to traditional grants, the Holding Fund will provide loans, guarantees and equity financing for integrated sustainable urban development projects. Funds repaid from these projects remain in Bulgaria and can be used for further re-investment in the region.
EIB Vice-President Kollatz-Ahnen, who is responsible for JESSICA Europe-wide, stated: "The EIB closely cooperates with the Managing Authorities of EU Structural Funds to help develop urban economies and the built environment in a strategic, sustainable way. I very much welcome Bulgaria's work in this area. I would also like to thank the European Commission and the Ministry of Regional Development and Public Works for the support they have provided, and I look forward to the successful deployment of JESSICA in Bulgaria."
The Government of the Republic of Bulgaria said that it had chosen the European Investment Bank as a Holding Fund Manager to ensure that EU best practices will be fully applied during the implementation of JESSICA in the country. The European Investment Bank currently manages 15 Funding agreements across Europe, ensuring the Bulgarian Government’s confidence in the institution’s credibility and reliability.

Background notes:

The mission of the EIB, the European Union’s bank, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investments.

JESSICA is one of the Cohesion Policy Joint Initiatives that were developed by the European Commission to contribute to making EU Cohesion Policy more efficient and sustainable. The JESSICA mechanism is based on cooperation between the Commission, the EIB and the Council of Europe Development Bank (CEB) and supports investments in sustainable urban development and regeneration.

This initiative, designed to increase the use of financial engineering instruments, allows Managing Authorities to use some of their European Structural Funds allocations to invest in revolving funds rather than providing one-off grant financing. By so doing, the Authorities can 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.