“JESSICA Urban Development Funds and sustainable energy”
Instruments to finance the transition to sustainable energy in regions and cities
COOPENERGY
Eugenio Leanza
JESSICA and Investment Funds
European Investment Bank
Milan, 20 June 2014
European Investment Bank
The structure of JESSICA
EUROPEAN COMMISSION
Structural Funds
Grant (not repayable as long as EC
Regulations adhered to)
OTHER INVESTORS
(Public & Private)
MEMBER STATE
Via a designated Managing Authority
Holding Fund
CITIES
optional
Contribution (repayable or non-repayable)
URBAN DEVELOPMENT FUND
Investment (equity, loan or
guarantee)
IFIs/Public
Agencies/
Banks
Projects forming part of an Integrated Plan for
Sustainable Urban Development
European Investment Bank
2
JESSICA intervention to date
JESSICA Funds in the EU
Holding Funds (HFs)
•
18 HFs managed by the EIB and currently
operating in 9 Member States
•
EUR 1.8bn in commitments through Funding
Agreements signed with Managing Authorities
3 8
42 agreements signed to date
•
EUR 1.6bn committed to UDFs
3 8
1
5 7
1
1 25 7
1 2
Urban Development Funds (UDFs)
•
1
1 7 7
1 3
1 2
3 6
2 2
1 1 5
1 2
1 3
3 6
2 2
1
European Investment Bank
1 5
18
JESSICA HFs in the Member States
42
JESSICA UDFs in the Member States
2
JESSICA Technical Assistance/ Fund
and Structuring Services
3
How to structure DFI Products in the next programming period
National Managing Authorities
EIB JESSICA services
• Fund and structuring services (FSS)
• Holding Fund (HF)
• Middle Office (MO)
i.
ii.
iii.
iv.
Strategy options for DFI utilisation:
National dedicated Priority Axis (mono-/multi-thematic)
Regional dedicated Priority Axis (mono-/multi-thematic)
Integrated Territorial Investment Strategy (urban/local-based)
Priority Axis for Financial Engineering Instruments (national/regional)
S t a n d a r d
Competitive/Smart City
11 Thematic
objectives
Priority area
targets
1. ICT
2. RDI
3. Public Administration
4. Education and training
5. Sustainable transport
F u n d / P r o d u c t
Energy Efficient City
7.
6. Climate Change
Environmental protection
8. Low-carbon economy
T y p o l o g y
Resilient/Social communities
9.
Competitiveness of SMEs
&…
10. Employment
11. Social inclusion
Rural investment product
9.
… agricultural sector
+ Optional thematic objectives
+ Optional thematic objectives
+ Optional thematic objectives
+ Optional thematic objectives
High growth/innovation
metropolitan poles
Eastern and Northern
European countries
Problematic/high
unemployment urban areas
Rural areas
European Investment Bank
4
JESSICA - integrated approach to urban strategies
Economic crisis
Financial and Real Estate crisis > Governmental bail-outs > Impact on public sector
finance > Deleveraging discipline > Viability of urban investment
Ageing
Transformation in age/migration structure > Impact upon public finance, labour and
housing markets, infrastructure, healthcare and communities
Decarbonisation
Urban areas under climate change impact > Decarbonisation/ Denuclearisation of EU
economy > Impact upon economy, social, environmental factors > Smart grid
technology
EU spatial integration
‘Single market for the cities’ > 1200-2000 functional urban areas compete for
location of resources and economic activity > New spatial equilibrium
Integrated urban investment strategy for highly dense urban areas focused on:
EMPLOYABILITY
(employment and unemployment
structures, job creation in local
population clusters,
social enterprise, skills)
SOCIAL COHESION AND
INCLUSION
(migration flows, educational
capabilities and re-training,
disability, impact of ageing,
urban poverty, etc.)
European Investment Bank
GREEN GROWTH
(technological change for
sustainable urban
transformation,
green development/ jobs
and smart city concept).
5
Functional urban areas as optimal catchment area
Functional urban areas as dense labour/energy/mobility systems:
•
Major labour hubs – concentration of job and education opportunities imply high levels of mobility and need for
urban infrastructure, efficient urban organisation and planning improves long-term resilience of local labour markets
•
Centres of innovation – urban density spurs the development of new ideas and provides the network and the
infrastructure for new industries
•
Hot spots for greening and efficiency gains – EE/RE for housing/public building and efficient urban transport key
components in the 20-20-20 EU energy strategy
Holistic Approach  Urban wealth growth
(Natural, Fixed, Human, Economic)
•
Jobs & Economic Activity
•
Financial / Fiscal
•
Sustainability
•
Capital & Enterprise Transfers
•
Human Capital Ageing / Migration
•
Asset Value Creation Process
European Investment Bank
6
Industrial reorganization brings to changes in urban geography
Changes in Production Shares from 1999 to 2011
The reorganization of
industrial production
changes the underlying
urban economic geography.
One example of this trend is
the EU automotive industry.
6.00%
4.00%
2.00%
0.00%
-2.00%
-4.00%
-6.00%
GER CZE SVK POL ROM HUN NED ESP BEL GBR FRA ITA
Total Number of Vehicles Produced - 1999 and 2011 ('000)
7000
6000
5000
4000
3000
2000
1000
0
GER CZE SVK POL ROM HUN NED ESP BEL GBR FRA ITA
GER
CZE
SVK
POL
ROM
HUN
NED
ESP
BEL
GBR
FRA
ITA
EU automotive industry reorganization - ('000) cars
1999
2011
Δ 1999-2011 Δ 1999-2011
5688
6311
624
5.24%
376
1200
824
4.74%
127
640
513
2.92%
575
835
260
1.64%
107
335
228
1.31%
128
214
85
0.52%
307
73
-234
-1.22%
2852
2354
-499
-1.93%
1017
562
-455
-2.24%
1974
1464
-510
-2.26%
3180
2295
-885
-4.00%
1701
790
-911
-4.60%
European Investment Bank
7
The impact on common urban infrastructure performance
Retirement Dependency Ratio
(65%+ / 15-64)
8
European Investment Bank
8
Dynamic approach to Smart City Investments
2010
2015
2020
2030
Building Envelopes
Passive House
EE measures - Solar thermal heating, street lighting
District Heating, CHP
RE - wind, biomass, geothermal, solar
Smart Grid, energy storage, new technologies
Biofuels, Clean Public Transport infrastructure and fleet
Electric vehicle fleet/infrastructure
Car trains ( Driverless cars)
Energy efficiency of capital stock
European Investment Bank
9
JESSICA: some examples
SCOTLAND
NORTHWEST
Sardinia
AuM: EUR 70m
Campania
AuM: EUR 100m
LONDRA
UK
AuM: GBP 250m (EUR 295m)
Absorption: > 50%
Energy efficiency, urban
regeneration, waste management
Key success factors:
•
Private project promoters
•
Flexible Investment Strategies
•
Planning instruments: wide possibilities
Sicily
AuM: EUR 148m
Italy
AuM: EUR 318m
Absorption: ca. 46%
Energy efficiency, urban
regeneration, waste management,
urban mobility
LITHUANIA
AuM: EUR 149m
Absorption: ca. 100%
Social housing (EE)
European Investment Bank
10
JESSICA in Lithuania: key facts
Key facts
•
Creation of the Holding Funf=d: July 2009.
•
Amount under management: EUR 227m (of
which EUR 149m contributed to JHF)
•
Selection of 4 Urban Development Funds
(UDFs): 2010 -2013
•
Signature of 7 Operational Agreements with
UDFs: 2010-2014
•
First investments: end of 2010.
•
Around 200 projects financed
European Investment Bank
JESSICA in Lithuania – Social housing and Energy Efficiency
12
Area of apartments
Number of floors
Number of apartments
Year of construction
Date of completion
Investments
Implemented measures
After
Before
Energy efficiency class
(according to Energy
Performance Certification
classification)
2590 m2
5
50
1978
September 20, 2011
385.319,16 EUR (Šiaulių bankas UDF)
Heating and hot water system upgrading;
replacement of windows and exterior doors;
roof insulation; wall insulation; basement
ceiling insulation; insulation of base; drinking
water pipelines and equipment replacement;
repair works of sewage system; floor insulation
on the ground; electrical wiring repair works;
and stairwell repair works
before upgrading – E, planned value – C,
achieved value – B
Heating before upgrade
293,94 kWh/m²
Heating after upgrade
121,01 kWh/m²
Energy saving
European Investment Bank
65%
Distribution of costs to consumers under the programme
implemented by the municipalities
SAVING
0 - 10%
50%
50 - 40%
Heating
Renovation
repayment
100%
50%
Before
renovation
Heating
After
renovation
No additional payments to owners of apartments after renovation
Source: Housing and Saving Energy Agency
European Investment Bank
JESSICA in Italy: key facts
Key facts
•
•
•
Regions: Sicily, Campania, Sardinia
Creation of JESSICA Holding Funds: 2009, 2010,
2012
AuM: EUR 318m
Signature of Operational Agreements with Urban
Development Funds: 2011-2012
Absorption: from ca. 10% in Q4 2013 to ca. 46% in
Q2 2014
JESSICA Italy: increasing absorption of funds
in 2014
Milioni
•
•
€ 160
46%
€ 120
€ 80
Strategy
•
•
•
€ 40
EUR 228m for Urban Regeneration and EUR 90m
for EE/RE
Project promoters: public sector and PPP
Planning instruments: limited
European Investment Bank
10%
€0
Absorption Q4 2013
Absorption Q2 2014
14
JESSICA in Italy – Urban regeneration, EE/RE and mobility
 Energy efficiency & renewable
energies in the health sector:
energy efficiency in a hospital
within a wider restructuration of
health infrastructures
 Urban mobility
efficiency:
and
energy
purchase
of
zero-emission
trolleybuses with higher autonomy
and last-generation technology,
connected to a smart network
 Urban regeneration in the educational sector:
research and student facilities in a university
campus
European Investment Bank
15
JESSICA in the UK – The London Green Fund
•
London Green Fund (the JESSICA HF for London): established in 2009 to invest in
carbon reduction projects in line with the London Plan.
•
Focused on energy efficiency, waste and de-centralised energy.
•
Investment Board chaired by a private sector independent, with representatives
from:
•
-
Greater London Authority (MA);
-
Environmental Agency; and
-
London Waste and Recycling Board.
Strategic relationship between public sponsors and UDFs for project
identification and co-financing.
•
“Trailblazer” for UK’s Green Investment Bank, focused on the same sectors and
co-investor in a waste project.
European Investment Bank
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JESSICA in Poland – Promoting urban rehabilitation
Revitalisation of
former garrison
building and
adaptation to
cultural purposes
Revitalisation of
post-industrial area
located in a city
centre
Urban
infrastructure and
office space
European Investment Bank
17
Contact
JESSICA and Investment Funds
European Investment Bank
98-100 Boulevard Konrad Adenauer, L-2950 Luxembourg
www.eib.org/jessica
Eugenio LEANZA
Head of Division
European Investment Bank
18