LEUVEN CLIMATE CITY FRAMEWORK LOAN

The project consists in a Framework Loan (FL) to support the multi-sector investment plan of the City of Leuven, including the implementation of its urban regeneration and climate city strategies.

The aim is to finance multi-sector urban development schemes in Leuven, in particular the refurbishment and upgrade of public buildings including Energy Efficiency (EE) and Renewable Energy (RE) measures, open public spaces and green areas, sustainable mobility schemes, urban renewal and new infrastructure, public lighting, affordable housing, school refurbishments and cultural heritage buildings.

The project supports the implementation of the City of Leuven (the City) Development Strategy and related sectoral strategies, as well as the City Climate Strategy. The EC has labelled Leuven as one of the "100 Climate Neutral and Smart Cities". This project covers urban development, regeneration and renewal supporting Leuven to build, refurbish, and upgrade urban infrastructure and public buildings. Furthermore, Leuven is aiming at becoming climate neutral by 2030. Given the above, this project is considered as a sub-operation under the 2024-0437 - EU CNC MISSION CITIES LENDING ENVELOPE.

The project is consistent with the EU Framework for Urban Development and Regeneration and the EIB strategies and guidelines related to eligible sectors. The project addresses a significant number of market inefficiencies and environmental externalities.

The project is aligned to the Climate Bank Roadmap, and it is fully consistent with the European Green Deal targets.

The flexible and long-term EIB Framework Loan addresses the City's funding needs and contributes to the stability of the City's financing sources, enabling the implementation of its investment program. It further allows the City to invest its funds and use the available EU funding, playing a pivotal role in funding strategic sectors of the economy.

The Bank's most significant financial contribution is the flexibility provided in terms of the availability of the loan, the possibility to change the rate profil (conversion/revision), the diversification of the City's funding sources at an attractive cost which is not easily found for this amount in the market, thereby complementing the financing offered by commercial banks. The Bank´s provision of a 25-year-financing increases the stability of the management of the Borrower´s long-term obligations. In addition, EIB´s financing contribution will underpin the investment grade profile of Leuven, acting as a catalyst for crowding in other possible financiers.

The eligible sectors include public goods and quasi-public goods in which the public administration is investing. The project will generate positive economic and social externalities through an improved provision of public facilities and services, resulting also in higher quality of enabling services for businesses and economic activities as well as improvement of the quality of life, urban environment, education, and social inclusion.

The project will contribute to promoting progress toward multiple Sustainable Development Goals (SDG), the contribution to sustainable cities and communities being the most significant one.

The technical assistance and advice provided to this Promoter under the EIB's advisory Circular City Centre (C3) facility are deemed Very Good, contributing notably to structuring the first operation with this City. The Bank has also reviewed the Climate City Contract (CCC) which Leuven has drafted to apply successfully for the label of a Climate Neutral City (CNC) under the climate advisory mandates.

The promoter's environmental management capacity to properly apply the relevant EU Directives will be verified during appraisal, particularly with regard to EU Environmental Impact Assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, EU SEA Directive 2001/42/EC, EU Habitats Directive 92/43/EEC and EU Birds Directive 2009/147/EC, EU Energy Performance of Buildings Directive EU/2010/31 and Energy Efficiency Directive EU/2023/1791 as revised in 2023, and the Urban Waste Water Treatment Directive (91/271/EEC). The status of environmental studies and public consultations related to the construction and refurbishment investments will also be further assessed during project appraisal. The schemes under the Framework Loan should have an overall positive impact on the environment by promoting sustainable urban development and reducing energy consumption. The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation, climate adaptation, transition to circular economy, and pollution prevention.

The promoter shall ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation, Directives 2014/24/EU and 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EE] as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.