Creation of an investment platform to support Smart Cities & Regions initiative in Slovakia

Transcription

1 Creation of an investment platform to support Smart Cities & Regions initiative in Slovakia EIB & SZRB AM & EY Brussel 29 th May 2018

2 SC&R market challenges URBAN DEVELOPMENT specific FINANCING specific Isolated urban development solutions lacking strategic integration and cooperation on the governmental level Lack of understanding of the Smart City concept and its economic implications Perception of high risk when investing in innovative solutions Technological risk Operational risk Construction risk Market risk Policy risk Make use of skills, innovation and technologies Large volumes of investment required Limited capacity to design and implement innovative urban development solutions Long-term delays before reaching maturity/profitability of projects Limited involvement of multiple stakeholder groups and alignment of their needs/expectations Lack of profitability (bankability) of projects with high socioeconomic value Smaller cities are lacking behind the capitals (unbalanced urban development) Barriers to access long-term financing means for high-risky investments Lack of demand due to the difficulty of the SC&R agenda and complexity of the integrated projects Needs for more off-balance sheet solutions and new forms of financing including EPC contracts

3 Country specific SC&R market challenges Slovakia MARKET AND POLITICAL SITUATION Fragmented SC&R market and stakeholders Limited involvement of multiple stakeholder groups and alignment of their needs/expectations Smaller cities are lacking behind the capitals (unbalanced urban development) Both communal and regional election during the Assignment Lack of proactivity from public promoters resulting in lack of supply from private promoters PROJECT ARCHITECTURE Low understanding of integrated SC&R projects and identification of additional monetization models Lack of knowledge and skills to design and implement integrated, innovative and sustainable SC&R projects Limited capacity with relevant skill sets of beneficiaries to define and implement SC&R projects Lack of proactivity from public promoters resulting in lack of supply from private promoters Technological risk associated with the potential for technology shortfalls AVAILABLE SOURCES OF FUNDING Knowledge of alternative financing solutions, including financial instruments is low Investments usually do not reflect city/region needs but availability of granting schemes Barriers to access long-term finance for smaller municipalities, which result in unbalanced urban development Difficulties to identify feasible business models of complex SC&R projects to take up a repayable form of funding

4 Addressing the market challenges - EIB SC&R initiative in SK Reduce the real and perceived risk and uncertainty of investment by providing access to experts in technical, financial and regulatory area in all stages of the projects Attract long-term finances from specialized institutions (e.g. funds) and private investors Develop aggregation mechanism to crate bankable and feasible investments with reduced transaction costs Provide technical assistance to municipalities in order to design bankable, sustainable (social, economic and environmental), integrated and inclusive projects while deploying suitable technological smart elements Increase attractiveness of financial instruments for projects generating cash flows Capacity building - promotion of SMART initiatives requires resources that are significant and often different from traditional ones Utilization of financial means including framework loan, direct and intermediated loans and investment platforms for Smart City investments

5 Project s aim and objectives Aim The main aim is to provide assistance to EIB and NDB in the market assessment and identification and development of a pipeline of projects, in order to develop investment opportunities in the area of SC&R Goals Deliverables I. Asses the market situation in the SC&R sector, including the technological readiness, specific areas of interests, relevant stakeholders and barriers II. Identify, design and finance SC&R projects aligning with the market and city needs I. Mapping of the relevant stakeholder groups and contacts (municipalities, self-governing regions, private sector) II. Database of documents and supportive schemes (strategies, investment/development programmes, action plans) relevant for the SC&R agenda III. Develop a project aggregation mechanism to create bankable and sizeable smart investments III. List of SC&R elements and areas within the SC&R strategies, Operational Programs and funding schemes IV. Create an investment platform to build an effective financing mechanism using financial instruments V. Design feasible financial architecture of selected SC&R projects VI. Support of sustainable urban and territorial development not only in Slovakia but also in the region IV. SC&R assessment methodology V. Applicable criteria of project s bankability and eligibility VI. Aggregation mechanism and categorization of SC&R projects VII. Database of categorized bankable SC&R projects in SK

6 Detailed introduction of the Project Outcomes Market Assessment Analysis specifying the situation in Slovakia, including barriers and main players Database of integrated SC&R projects with additionally defined monetization models supporting social inclusion and positive impact on the environment Structure of an investment platform utilizing multisource, revolving and innovative financing, including private and alternative sources of funding and technical assistance

7 Defined parameters and model for the analysis of SC&R projects Adopting a comprehensive approach in the definition of well-balanced SC&R selection criteria to underpin the concept complexity and coverage Main goal was neither contradict with EIB ones nor lead to narrowing down too much the scope of potential projects Avoid excluding viable projects and/or to make an EFSI financing to a potential platform impossible due to different eligibility criteria Definition of SC principles and areas to create a catalogue of integrated, bankable, inclusive and sustainable SC&R solutions SMART CITY PRINCIPLES LIST OF SC&R ELEMENTS AND AREAS One-source financing Multi-source financing A B C SC Project 1 + SC Project 2 + SC Project 3 Geographical level (e.g. projects Prešov region) Content level (e.g. projects in the area of energy efficiency) Large-scale investment projects Investment Platform Investment platform brings together investors / projects Financial instruments Loan Guarantee Equity Private sector investments Grants Own sources NDBs CATALOGUE OF SC&R PROJECTS

8 From Urban to Smart Projects smartification Smart gap analysis Showcase database of Smart City projects with clearly defined parameters Country/market specific Smart City projects obtained from multilevel research methods Digital FATool One-stop-shop designed to match a project with corresponding, state-of-art smart projects and assess it based on clearly defined, measurable parameters. The tool suggests smart improvements and recommends actionable insights to deliver integrated SC projects by implementing complex financial-analytical algorithm. Deliver comprehensive analysis to enhance isolated projects and design integrated projects with smart improvements in deployed technology, business and financing models, involved stakeholders and other defined parameters Financial architecture of specific projects Deliver an indicative financial structure of proposed smart projects and suggest the financial options based on the existing product portfolio at the market Submit a project card with clearly defined parameters and categories in order to filter out corresponding business cases of smart solutions A financial-analytical tool is created to manage the end-to-end process of SC project assessment, technological readiness and proposition of financial architecture Identify and analyze the project potential in terms of smart elements and available financial options through a complex algorithm

9 Engagement of stakeholders On the ground approach December 2017 February/ March 2018 February/April 2018 May/June 2018 Identification of stakeholder s personas Conducting interviews/calls with selected stakeholders Requesting projects pipeline and consolidate received projects Evaluation of categorized SC&R projects and followup calls/ s Deployment of EY & consortium partners knowledge and network base in Slovakia in order to cluster stakeholders into personas and secure the most efficient way of communication: Organization of a roadshow across Slovak cities and regions in order to obtain data about SC&R agenda and projects. It aimed to involve stakeholders in the project considering: Establishment of a complex process to gather relevant data (projects) from municipalities it consisted of 2 round approach: Conducting a preliminary assessment of project s smartness, readiness and bankability of SC&R projects. Cities and regions Municipal companies Private sector (telecommunication, P&U, waster, water, transport companies, ICT, etc.) Public bodies including ministries Agencies, associations and clubs Cities/regions above inhabitants 60 municipalities & self-governing regions visited Interviews conducted in less than a month Combination of calls/interviews/workshops Followed by the private sector representatives Creation of a structured form for project submission that was sent to relevant municipalities & SGR Received unstructured data, often in Slovak language Follow-up calls to request missing data Consolidation of received information resulting 650 projects in the database Assessment of project s smartness Categorization of smart and conditionally smart projects requesting minor assistance Consolidation of available information followed by assessment of project s readiness and bankability

10 Key findings Examples of categorized SC&R projects Energy efficiency Smart public lightning Smart parking and management of public and private parking spaces incl. Integrated parking systems Multimodality and integrated transport systems Clean transport Waste management Environmental protection and monitoring Public and social services Public space management Community building and social inclusion Tourism Education Cycling paths and alternative transportation infrastructure Public transportation and maintenance projects incl. revitalization of routes/vehicles, clean and sustainable transport means, integrated payment systems E-mobility Route, utilization and separation waste management Monitoring, collection and provision of basic parameters in transport, energy and the environment Integrated city card (e-government), e-health Revitalization of public spaces including parks, sport & leisure infrastructure & programmes Building senior houses, new devices in a healthcare / monitoring health conditions of seniors Reconstruction of visitors routes, digitalization, mobile app, singular platform, visitor card, accessibility of information Reconstruction and revitalization of educational institutions incl. implementing new ways of teaching and learning

11 Key takeaways and way forward EIB goals and objectives EY project s outcomes Pilot project scalability Actively supporting multiple urban agenda-related initiatives to help local decision-makers use existing funds more efficiently Tailored on the ground approach to individual markets/countries in order to evaluate the market potential and create the business opportunities in new SC&R agenda Provision of a diverse portfolio of financing instruments while pooling different funding opportunities reflecting the needs and complexity of the SC&R projects Establishing a strong position of EIAH to support local stakeholders in design and implementation of SC&R projects So far, gathered more than 700 projects across multiple sectors not only energy and mobility, but also educational infrastructure, multimodality, tourism, community building and social inclusion Crucial for the project to possess knowledge and network of the local market in order to identify relevant (SC&R) projects and assess the investment potential Active support of stakeholder groups from both private and public sector necessary to provide further technical assistance to support the conceptualization of projects fiches, technology specification Capacity building inevitable in both cities and regional level Need for blending and technical assistance for municipalities Preliminary assessment of the market potential in the area of SC&R in Slovakia there are existing/planned perspective projects in all SC&R areas, often requiring only minor technical assistance to categorize under the smart investment Scalability of the pilot project in Slovakia to other EU countries Opportunities for cross-boarder cooperation Critical data confirming the complexity of Smart City concept and projects perceived by municipalities, private and public sector and market needs to provide technical assistance Smartification of the projects - use of financial-analytical tool in order to evaluate the effectiveness and bankability

12 Zuzana Nehajova InnovEYtion Hub Leader Tel Mobil Juraj Hostak CSE Smart City Coordinator InnovEYtion Hub Advisor Tel Mobil