JESSICA

Period: 2007 - 2013

JESSICA is a joint initiative for financing sustainable urban development, operated by the European Commission in cooperation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB). JESSICA aims to coordinate their approach with the objective of providing financing for urban renewal and development actions as well as for social housing, using a combination of grants and loans. JESSICA is one of three new cohesion policy initiatives, with the other two being JASPERS, JEREMIE and Regions for Economic Change.

JESSICA is the acronym for Joint European Support for Sustainable Investment in City Areas.

The EIB and CEB have been financing urban development through different types of loans. Within JESSICA, target loans will complement public resources (Community and national) for actions within the Operational programmes supported by the Structural Funds. By coordinating the approaches from the two banks and the Commission, Jessica aims to help the authorities in the Member States efficiently use public resources from national and Community sources.

The Operational Programmes financed by the Structural Funds and the Cohesion Fund are negotiated between the national or regional authorities and the Commission before the programmes are adopted. These Operational Programmes contain, when necessary, urban development and renewal plans. When these plans already exist, the EIB and CEB will identify projects that are eligible for their support or for support from other financial sources, including private sector contributions.

How JESSICA functions:

The initiative allows for two possible management options:

• In the first option, a managing authority launches a call for expression to development funds. A funding agreement will then be signed between the managing authority and the selected urban development fund. The urban development fund then provides public private partnerships and other urban projects with loans, equity or guarantees.

• The second possibility is that Jessica is organised through holding funds. Holding funds are those investing in more than one urban development fund, provides them with equity, loans or guarantees. Also in this case, a funding agreement is signed between the Member State and the Holding Fund. The urban development fund then provides public private partnerships and other urban projects with loans, equity or guarantees.

The JESSICA initiative allows managing authorities the possibility of providing funding for public-private partnership or other urban development projects that are capable of repaying in the long-term. JESSICA is also expected to:

• Attract contributions from international financial institutions, banks, the private sector, thereby achieving greater leverage from scarce grant resources.

• JESSICA also allows managing authorities access to expertise as well as greater accessibility to loans in the field of urban development.

Info regio- JESSICA

Memorandum of Understanding between the Commission, the European Investment Bank and the Council of Europe Development Bank PDF