DG State Aid – Control and Regeneraton of Deprived Urban ... - REVIT

N82/2001 English Cities Fund
This scheme creates a pilot public-private investment vehicle aimed at attracting institutional
and other private sector investors into town and city locations in priority regeneration areas.
This vehicle is intended to provide a model for regeneration by demonstrating the potential
commercial viability and attractiveness of urban regeneration to private sector funds. Such
investors, generally, will not participate in such regeneration projects due to the high level of
risk involved. The result is that development projects in regeneration areas suffer from a lack
of finance, therefore public support is needed.
The UK authorities’ investment will take the form of an equity stake in the Fund.
The Fund once private participation has been secured will then make equity investments in
a series of urban regeneration property development projects, mainly of a “speculative”
nature (where the eventual occupier of the development is unknown).
In its decision, the Commission stated that state aid was present within the English Cities
Fund scheme. As the UK authorities invest in the Fund on terms less favourable than those of
the private investors, state aid is present to these private investors. However, whilst state aid is
present, it was approved as compatible with the guidelines on national regional aid.
For Further Information:
Decision:
http://ec.europa.eu/community_law/state_aids/industrie/n082-01.pdf
Regional Aid Guidelines (Annex 2 – Fiche III):
http://europa.eu.int/comm/competition/state_aid/legislation/aid3.html#F
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