Press Release: Published August 2012
Today, the European Investment Bank (EIB), in its capacity as the Manager of the JESSICA Holding Fund Mazovia, has concluded an agreement establishing an Urban Development Fund (UDF) with Bank Gospodarstwa Krajowego (BGK).
Mazovia is the fifth Polish Region, after Wielkopolska, Westpomerania, Pomerania and Silesia, in which a JESSICA UDF has been created. The UDF managed by BGK will invest approximately PLN 155 million (EUR 39 million) into projects located in the city areas of the Region.
The JESSICA investment portfolio in Mazovia may include projects with the following scope: revitalisation of urban areas, revitalisation of post-military and post-industrial areas, development of energy infrastructure encompassing investments in renewable energy and energy efficiency, creation and development of clusters of regional character.
The Mazovia Managing Authority is the fifth regional authority in Poland, following the Wielkopolska, Westpomerania, Silesia and Pomerania Managing Authorities, to establish a JESSICA Holding Fund (HF) within the EIB with the aim of deploying EU Structural Funds for investment in cities. The corresponding Funding Agreement was signed on 15 July 2011 and its main objective is to contribute to increasing cities’ competitiveness by stimulating their economic potential and multifunctional approach to the development of degraded areas.
BGK is Poland's only fully state-owned bank. The primary business objective of BGK is to provide banking services to the public finance sector, in particular by supporting the government's economic programmes, as well as to actively participate in local government and regional development programmes implemented with the use of public funds, including those of the European Union. BGK has been acting as the Manager of the UDF in the Wielkopolska Region (since September 2010) and in the Pomerania Region (since October 2011) with, respectively, approximately PLN 294 million and PLN 159 million under management.
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
The EIB's role is to support investment projects, among others, in the areas of cohesion and convergence, in particular by addressing economic and social imbalances in disadvantaged regions, mitigating and adapting to the effects of global warming, environmental protection, sustainable and secure energy, promoting an economy that stimulates knowledge and creativity through investment in information and communication technologies as well as human and social capital. In the context of the JESSICA initiative, the EIB acts as the Manager of the Holding Funds on behalf of and for the benefit of the Managing Authorities. 18 Holding Funds have been established up to date with approx. EUR 1.8 billion under EIB’s management and agreements with 34 Urban Development Funds have been entered into by the EIB.
JESSICA (Joint European Support for Sustainable Investment in City Areas) 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 part 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.