The European Investment Bank (EIB) and the Spanish Energy Saving and Diversification Institute (IDAE) have concluded a finance agreement to launch a JESSICA holding fund designed to finance energy efficiency and renewable energy projects in an innovative use of EU structural funds. The agreement was signed in Madrid today by EIB Vice-President Magdalena Álvarez Arza and the Secretary of State for Energy, in his capacity as Chairman of IDAE, Fabrizio Hernández Pampaloni.
EIB Vice-President Magdalena Álvarez Arza underlined “the multiplier effect of the JESSICA initiative, which will make it possible to increase the volume of financing for projects contributing to greater energy efficiency and more sustainable growth, in line with the objectives of the EIB and the European Union”. She went on to stress “the ability of these instruments to foster job creation and economic recovery by giving a boost to a highly innovative sector in which Spain represents an international benchmark.”
The Secretary of State for Energy, Fabrizio Hernández Pampaloni, emphasised “the innovative nature of this financing formula aimed at promoting energy efficiency and renewables”.
The agreement signed today lays down the operational mechanisms of the fund, which will be initially endowed with EUR 127.6 million and managed by the EIB. The capital contributions of FIDAE (the Energy Saving and Diversification Investment Fund) will come from the 2007-2013 ERDF Regional Operational Programmes for Andalusia, the Canaries, Castilla y León, Castilla-La Mancha, Ceuta, the Valencia Region, Extremadura, Galicia, Melilla and the Murcia Region, where the investments will be made. Of that amount, EUR 87.8 million will come from the EU’s European Regional Development Fund (ERDF).
The available resources will be channelled through urban development funds (UDFs) managed by financial entities that will act as intermediaries selected by competitive tendering once the fund has been launched. The financial products to be deployed will take the form of mainly loans but also venture capital and participating loans.
Energy efficiency, renewable energy and clean transport projects in the construction, industry, transport and energy-related public service infrastructure sectors will be eligible for financing by this facility.
The fund’s decision-making and governing bodies will include representatives of the above-mentioned Spanish Regions and IDAE.
The fund will also be designed to leverage private finance to achieve a total investment target of up to EUR 600 million by the end of December 2015.
The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Founded in 1958, it operates in the 27 Member States and more than 130 other countries worldwide.
JESSICA (Joint European Support for Sustainable Investment in City Areas) is an initiative developed by the European Commission and the EIB together with the Council of Europe Development Bank that enables the Member States to use part of their EU grants (the so-called structural funds) to make refundable investments in the urban environment.