£20million Euro funding to boost business

By on 25/07/2011 in News

A proposal to bid for £20 million of European Regional Development Funds (ERDF) to help urban development in Birmingham and the West Midlands was approved by Cabinet today (July 25).

With the recession and the credit crunch having impacted significantly on the development market within the West Midlands, this City Council-led initiative aims to unite local authorities from across the region to secure fresh investment finance into the area.

The overall fund worth £40 million will help the development of business accommodation, sustainable office and industrial projects, and specialist facilities for organisations to operate from.

Cllr Paul Tilsley, Deputy Leader of Birmingham City Council said: “This is an exciting new proposal with the potential of bringing in vast amounts of development finance into the city with a rapid rate of return - it is an investment for business in the future.

“By working with other authorities across the region we can come up with a strategic plan that will give businesses a much needed boost when it comes to being competitive in the both the local and global market place.”

The proposal seeks to establish a fund through the JESSICA initiative; a project framework used across Europe which utilizes revolving urban development funds -  in simple terms, the reinvestment of initial project returns into later schemes.

JESSICA targets those projects that would not usually proceed because they could not attract the finance they require from the open market.

In order for the initiative to take place in Birmingham and the wider region, partners must be able to demonstrate the demand for projects in the area and how they are eligible for investment.

A viable project must be capable of producing capital or revenue returns, and the funds must be committed to these projects by 2015.

ENDS

For more information contact Kris Kowalewski on 0121 303 3621

What is JESSICA?

•    JESSICA is a policy initiative of the European Commission (EC), created so that ERDF Structural Funds can be used in revolving funds, allowing reinvestment of initial project returns into later projects.

•    JESSICA invests in viable projects via loans, equity and/or guarantees – which are required to be repaid to the fund, with a rate of interest.  It does not provide grants, and is not a gap funding tool. Projects must be capable of providing a return to JESSICA as a funder. These returns are not subject to claw back by ERDF.

•    The JESSICA funds must be invested in eligible projects by 2015, the end decommittment date for the 2007/13 programme.

•    JESSICA investment must be  matched with other public or private sector sources.  The funding must be in place before any ERDF money can be drawn down by the projects.

•    A JESSICA fund invests in projects through an Urban Development Fund (UDF) - a legal entity that can be controlled by either the public or private sector, or a combination of both.  The UDF considers requests for investment from project promoters, appraising them against an investment strategy that can be set by the Local Authorities in its area.

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