The European Investment Bank (EIB), the Bulgarian Ministries of Regional Development and Public Works (MRDPW), as well as of Finance signed today a Memorandum of Understanding (MoU) for assisting Bulgaria's largest municipalities with drawing up integrated urban development plans and projects, the bank said.

The MoU allows also the funding of urban development projects via a specially established holding fund. The fund will come under the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative. The MoU which establishes this agreement was signed by Matthias Kollatz-Ahnen, EIB Vice-President, and Meglena Plugtschieva, Deputy Prime Minister of Bulgaria.

JESSICA is a joint European Commission and EIB initiative, supported by the Council of Europe Development Bank, which promotes the investment of European Structural Funds and other resources in sustainable urban development projects.

The signing of this MoU follows the completion of a JESSICA Evaluation Study for Bulgaria, funded jointly by the European Commission, Directorate General Regional Development and the EIB. The study demonstrated that there is scope for the use of JESSICA financing in Bulgaria.

JESSICA is one of the Cohesion Policy Joint Initiatives that were developed by the European Commission to contribute to making EU Cohesion Policy more efficient and sustainable. The JESSICA mechanism is based on cooperation between the Commission, the EIB and the Council of Europe Development Bank and supports investment in sustainable urban development and regeneration.

This initiative, designed to increase the use of financial engineering instruments, allows Managing Authorities to use some of their European Structural Funds allocations to invest in revolving funds - rather than once-off grant financing. By doing so the authorities can recycle financial resources in order to enhance and accelerate investment in urban areas. These investments, which may take the form of equity, loans and/or guarantees, are delivered to projects via Urban Development Funds and, if required, holding funds.

So far similar Memoranda of Understanding have been signed between the EIB and the following countries and regions: Galicia (Spain), Wielkopolska (Poland), Portugal, London, Greece, Andalucia (Spain), North West of England (UK) and Castilla-La Mancha (Spain).

The EIB is the European Union's long-term financing institution. It contributes to the integration, balanced development and economic and social cohesion of the Member States by financing sound investments. Between 2007 and 2013, finance of some EUR 350 billion has been earmarked for EU cohesion policy. This represents nearly 36% of the Union's total budget, and puts the allocation for this finance stream ahead of the common agricultural policy for the first time.