The North West Regional Development Agency (NWDA) is to launch a £46m holding fund to help finance regeneration of urban areas.

In partnership with the European Investment Bank (EIB), NWDA has agreed to set up a Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative to protect urban regeneration schemes from the economic downturn.

The fund will be supported by the Council of Europe Development Bank, which promotes urban regeneration projects.

Simon Brooks, head of EIB activities in the UK, said:

‘We intend to use EIB financial resources to their full advantage, and where appropriate to complement the investment of European Structural Funds in the region.’

Steven Broomhead, chief executive of the NWDA, said:

‘JESSICA will allow us to invest in revolving funding, in addition to the normal single use grants.

'This might be in the form of equity, loan or guarantee which can then be re-used on other projects again, and again, extending the life of our European funding and helping us to maintain a level of physical regeneration during the difficult economic climate.’

The North West is the second English region to sign a memorandum of agreement for a JESSICA scheme; the London Development Agency signed a similar agreement with EIB in December last year.

The EIB has lent £2.5bn for investment in to development in the North West over the last 10 years, and £3.6bn to UK projects last year.