Financing Cities – a view from the European Investment Bank

Desmond Gardner

By Desmond Gardner, on May 15th, 2018

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How can the European Investment Bank (EIB) support the financing of urban projects?  What does a city need to do to access EIB finance?  What is EFSI and what can it do to help a city fund both innovative actions and the development of infrastructure in its area?

After twenty years working in cities and asking these questions, I now find myself in the EIB’s advisory team trying to answer them. I am, therefore, pleased that URBACT has given me the opportunity to share with practitioners my thoughts on the current landscape for financing urban development and how the EIB can support cities in mobilising investment in their areas.

The Urban Agenda for the EU is a huge opportunity for cities to directly harness the full power of the European Union (both funding and wider strategic and technical support), reflecting the recognition of the importance of cities to the EU’s future social and economic growth. The EIB, as the EU’s bank, is similarly aligning its advisory services to complement the Urban Agenda as well as reinforcing its existing lending activities to support urban development. Additionally, the Investment Plan for Europe has allowed the EIB to mobilise the European Fund for Strategic Investments (EFSI) and the European Investment and Advisory Hub (EIAH) to accelerate the funding and delivery of investment across the EU.

URBIS: urban advisory platform of the European Investment Advisory Hub

URBIS ADVISORY HUBThese powerful new tools come together within the URBIS platform that is a new dedicated urban advisory platform within the EIAH, developed by the European Commission in partnership with the EIB. URBIS was launched in November 2017 and is already supporting 16 projects in sectors as diverse as social outcomes investing and funding municipal development in smaller cities.

To secure support, cities need to bring forward mature or maturing financially viable projects, programmes or investment platforms that require support from the platform to successfully bring the project forward to delivery. The URBIS platform can be accessed through the dedicated portal on the EIAH’s website and the EIB is keen to encourage cities with viable and maturing projects in need of support to bring them forward for consideration for URBIS support.

Fi-compass: resource hub for practitioners on local development investment funds

fi_compassAnother important way in which cities can access support for its urban development projects is through the fi-compass platform, which is also provided by the EIB in partnership with the European Commission. The fi-compass platform aims to support the implementation of financial instruments to invest European Structural and Investment Fund (ESIF) resources.

The fi-compass website, together with the associated programme of events, provide a comprehensive resource hub for practitioners to use to access guidance, case studies and other materials to support local development of investment funds, including urban development. Under the fi-compass platform we are also working with a group of cities seeking to develop a multi-regional investment platform that would provide cities with a streamlined framework in which they can quickly establish an investment fund, using ESIF or other, local, resources to support delivery of an integrated urban development programme. Core partners in this initiative, The Hague and Manchester, initially collaborated on financial instruments in an URBACT network, CSI-Europe.

The European Investment Bank is open for cities

The EIB is, therefore, open for cities to do business with, both through its advisory services and its lending activities. In particular, the bank is keen to develop further opportunities to combine its lending, EFSI and ESIF resources in a way that leverages private sector investment. Cities can be important partners for the EIB. As leaders of their community, city authorities are uniquely placed to develop cross-sectoral integrated urban development strategies that reflect the local competitive advantages of their area. They can also invest and coordinate third party support to allow priority projects and services to be brought forward for implementation, generating demand for financial instruments, EFSI and EIB lending.

A time of opportunity for cities

csiThis is, therefore, a time of opportunity for cities and those keen to take advantage of the current push to mobilise investment into urban development can do so by investing time and resource to realising their integrated urban development strategy. A city that has developed its own capacity and pipeline of projects is well placed to take advantage of advisory support to mobilise investment and identify the funding needed to implement its pipeline of projects.

As part of the EIB’s advisory team, I have already seen how the benefits of the EIB working in partnership with cities and Managing Authorities can help create innovative financial instruments and investment into urban projects. With the URBIS platform, fi-compass and other advisory services, the EIB will continue to seek to develop these partnerships with cities and I look forward to seeing further growth in financial instruments and other investments of EU funds in urban development in the future.

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