Urban Development Funds


Investments in sustainable urban development projects consist of the revitalization of urban brownfields, the expansion of social and technical infrastructure as well as energy-efficient refurbishment in housing. All projects have in common that they render two kinds of returns – a social and/or ecological return for public authorities (upgrading of city districts, raising the quality of life of urban citizens, saving CO2) and also a financial/economic return.

Due to the hybrid character of sustainable urban development projects – rendering social/ecological returns and (limited) economic returns – in 2007 the EU commission has introduced urban development funds as an efficient financing alternative to traditional grant financing. Financial intermediaries provide revolving financing instruments – equity, loans, and guarantees – to sustainable urban development projects instead of (lost) grants. The aim of the fund model is to create a sustainable and self-sustaining financing model for sustainable urban development projects based on revolving project returns and the additional generation of private capital and know-how (investors, banks, project developers). The challenge of this research is to coordinate the interests of all stakeholders with different risk-return preferences by developing innovative corporate governance fund models.



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Nadler, M./Nadler, C. (2019): Financial engineering instruments for sustainable urban development – introducing an impact analysis for innovative urban policies, in: International Journal of Real Estate and Land Planning 2, 74-83.

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Kreuz, C./Nadler, M. (2010): JESSICA – UDF Typologies and Governance Structures in the context of JESSICA implementation, Luxemburg 2010.

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Kreuz, C./Nadler, M. (2008): Urban Development Funds in Europe – Ideas for implementing the JESSICA Initia­tive – Report for the Marseille meeting of EU Urban Policy Ministers – 25.11.2008.