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Implementation of the JESSICA initiative in the Wielkopolska Region Radosław Krawczykowski

Implementation of the JESSICA initiative in the Wielkopolska Region Radosław Krawczykowski Director of Department Marshal Office of the Wielkopolska Region. Wielkopolska Region. • Second biggest region in Poland in terms of surface - 29 826 km2(9,53%)

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Implementation of the JESSICA initiative in the Wielkopolska Region Radosław Krawczykowski

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  1. Implementation of the JESSICA initiative in the Wielkopolska Region Radosław Krawczykowski Director of Department Marshal Office of the Wielkopolska Region Marshal Office of the Wielkopolska Region

  2. Wielkopolska Region •Second biggest region in Poland in terms of surface - 29 826 km2(9,53%) •Third biggest region in Poland in terms of population -3414 thou. (8,9%) •55,5% of population live in cities •109 cities and 226 communes •Poznań –capital of Wielkopolska (580 thou. inhabitants)

  3. implementation of the JESSICA initiative Objectives of the JESSICA initiative are reflected in: • Measure 4.1. „Revitalisation of urban areas” and • Measure 1.4. „Support for the investments linked to Regional Strategy for Innovation”, Scheme III „Investments in support of business environment institutions in urban areas” of the Wielkopolska Regional Operational Programme for years 2007-2013 (WROP) Marshal Office of the Wielkopolska Region

  4. implementation of the JESSICA initiative JESSICA Funds: approx. EUR 66 000 000 contributed from the ERDF and State Budget geographical split of allocation: • 60% - Large cities > 50 thousand of inhabitants • 40% - Small cities < 50 thousand of inhabitants Marshal Office of the Wielkopolska Region

  5. implementation of the JESSICA initiative Managing Authority Board of Directors of the Wielkopolska Region Holding Fund – European Investment Bank Urban Development FundBank Gospodarstwa Krajowego Urban Projects Marshal Office of the Wielkopolska Region

  6. implementation of the JESSICA initiative European Investment Bank was appointed as a Manager of the JESSICA Holding Fund on the basis of Article No 44 of Council Regulation (EC) No 1083/2006 of 11 July 2006 Bank Gospodarstwa Krajowego was selected as an Urban Development Fund on the basis of the appraisal of offers conducted by a panel of experts of the European Investment Bank. Marshal Office of the Wielkopolska Region

  7. Timetable for the implementation Marshal Office of the Wielkopolska Region

  8. Timetable for the implementation

  9. Revitalisation programmes Requirement for developing revitalisation programmes-according to art. 43 of the Commission Regulation (EC) no. 1828/2006 the JESSICA Initiative funds investments in public and private partnerships as well as other urban projects included in Integrated Development Plan for Urban Areas Guidelines regarding the rules of developing revitalisation programmes enabling to apply for support within the framework of the JESSICA Initiative were adopted by MA in September 2009.

  10. Ways of recognizing dysfunctional areas: • The choice of dysfunctional areas based on at least three of the criteria applicable within the framework of Integrated Regional Operational Programme (ZPORR); • The choice of dysfunctional areas based on at least three of the criteria applicable within the framework of URBAN II community initiative; • The identification of dysfunctional areas based on the criteria of the support for actions related to housing; • A detailed description indicating reasons for which the areas should be subject to revitalization measures.

  11. Urban Projects (expected by MA) Revitalization projects are expected to ensure combination of: • commercial components designed to yield return on investments and • social components leading to: quality of life improvements, reducing adverse social factors and having a favourable environmental impact. Revitalization projects should be aiming at strengthening of local developmentpotential. The assistance of these projects will include such problems as: • social exclusion, • high level of crime • total decrease of life level in handicapped town parts.

  12. Thank you for your attention Radosław Krawczykowski E-mail: radoslaw.krawczykowski@umww.pl

  13. Marek Szczepański Director of European Programmes Department Conference on JEREMIE and JESSICA Brussels, 29th - 30th November 2010 Urban Development Fund in Wielkopolska Region - first lessons learned

  14. Bank Gospodarstwa Krajowego (BGK) • Established in 1924, operating as a state-owned bank whose mission includes supporting local authorities’ programmes for regional development • Supervised by the Ministry of Finance of Poland • Leader in local governments financing (15.5% market share in municipal loan market) • The largest state development bank in Central and Eastern Europe • Branch network covering the whole country (branches in all regions) • Key klients: - Central Government - Local governments - SMEs and strategic enterprises 15

  15. Basic information about the UDF in Wielkopolska • Signing of Operation Agreement with EIB: 29th September 2010 • Available amount: approx. € 74.7m (PLN 293m) • Financial product currently available: loans • Loan maturity: maximum 20 years • Grace period: maximum 4 years • Loan interest rate: set on the basis of the reference rate of the National Bank of Poland (currently 3.5%), reduced by the Revitalization Index • Revitalization Index: determined on the basis of superiority of economic elements over the commercial nature of the project (maximum – 2 percentage points) 16

  16. Basic information about the UDF in Wielkopolska • Share of loans in investment costs: maximum 75% of the total eligible investment cost (state aid rules – Regional Investment Aid) • Potential investors: local governments, municipal companies, private investors, public-private partnerships, universities, NGOs, churches • Launching call for applications for loans: 29thOctober 2010 • All potential projects should be covered by Integrated Plans for Sustainable Urban Development 17

  17. Potential urban projects to be financed by the UDF 18

  18. Potential urban projects to be financed by the UDF 19

  19. First observations • High interest of investors (over 50 contacts in 3 weeks) • Comparable number of investors from private and public sector (both self-governments and public companies) • Diversity of project types (swimming pool, bowling alley, shopping center, office space, business incubator, dormitory, investment sites, parking lots) • Diversity of project sizes (min. € 0.27m, max. € 50m) • Diversity of the expected financial support (min. € 0.2m, max. € 8,6m) • No PPP projects ready to be financed Main problems observed: • Inability to finance projects in the form of equity contributions (lack of relevant state aid rules) • Sustainability of projects (doubts about the ability to sell the investment after the completion of the project) 20

  20. Next steps • Signing the first investment agreements with investors: • December 2010 • Review and potential modification of loans/equity conditions: • January - February 2011 • Conference summarizing the first phase of the operation activities of UDF: • March 2011 Futher work over potential projects (including railway stations): • 2011 21

  21. Contact details European Programmes Department Bank Gospodarstwa Krajowego Phone +48 22 522 94 10 marek.szczepanski@bgk.com.pl, jessica@bgk.com.pl www.bgk.com.pl Thank you for your attention! 22

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