New £50 million fund to support urban regeneration in Scotland

New £50 million fund to support urban regeneration in Scotland
Learning Network
05.08.10

You may be interested to know that the Scottish Government has signed a funding agreement with the European Investment Bank (EIB) to establish a new £50 million fund to support urban regeneration in Scotland.

What is the JESSICA fund?
JESSICA (Joint European Support for Sustainable Investment in City Areas) has been developed by the European Commission and the European Investment Bank (EIB), in collaboration with the Council of Europe Development Bank.

It allows the use of some of the ERDF (European Regional Development Fund) grant allocation as a source of loans, equity investment and guarantees that, alongside complementary resources from the EIB and others, will help de-risk developments in regeneration areas currently considered too marginal for commercial lenders or investors. A range of activity that directly supports employment can be supported through JESSICA; along with measures to support growth industries, such as renewable energy.

Benefits of JESSICA
The fund has the potential to lever in additional sources of public and private investment; and to create a sustainable fund to support regeneration activity in Scotland well into the future.

The underlying principle is to use ERDF to invest in projects with the expectation of a return on the investment, rather than following the traditional grant approach that allocates ERDF funding with no expectation of repayment.

JESSICA allows the investment of ERDF and Scottish Government cash – in the form of equity, loans and/or guarantees – in a way that creates a commercial return. This return can then be re-invested into new urban development projects that will create further cash for new projects. An evergreen fund of this type would leave a lasting legacy to support regeneration and economic development throughout Scotland beyond the end of the current Structural Funds programme in 2013.

Further information is available at
http://www.scotland.gov.uk/Topics/Built-Environment/regeneration/jessica