£50m 'evergreen' loans set to boost urban regeneration

TENS of millions of pounds will be spent on transforming rundown areas in Scotland's cities and towns, it was announced yesterday.

A 50 million package is intended to fund major projects including new business parks and the refurbishment of derelict sites and crumbling buildings.

Other projects could include environmentally friendly energy-to-heat systems, social housing and improving public transport.

The Scottish Government will give loans to urban regeneration companies that present plans for schemes to improve large urban areas.

Bids for a share of the cash are likely to be accepted from early 2011, with work set to start on projects by summer that year.

The funding will be given to firms in the form of loans, which will only be paid back if a project starts to make money.

Cash clawed back would then be used to fund further improvements across Scotland's cities and towns. A large number of jobs are expected to be created through projects receiving money, although the exact figure is not yet clear.

The Scottish Government is providing a total of 26m of the cash, with 24m coming from the European Commission towards the fund called Joint European Support for Sustainable Investment In City Areas (Jessica).

Housing and communities minister Alex Neil announced the new initiative during a visit to Bridgeton Cross in Glasgow's east end, which previously received European Union and Scottish Government cash for projects to improve the area.

Mr Neil said: "Regeneration is critical to boosting our economy and safeguarding jobs.

"This new flexible 50m fund will help kick-start a whole range of fantastic regeneration projects that will revitalise communities most in need and support economic recovery.

"Importantly by ensuring we recycle the cash investment, through an 'invest now, repay us later' model, we will support many key projects and leave a lasting legacy to fund regeneration in Scotland for many years."

Simon Brooks, vice-president of the European Investment Bank, which helped put together the package from the Scottish Government and EU, said: "The European Investment Bank looks forward to supporting significant regeneration across Scotland's towns and cities.

"This will support economic recovery, revitalise local communities for the benefit of their inhabitants and attract additional much-needed investment."

Johannes Hahn, European commissioner for regional policy, said: "The European Regional Development Fund will grant 24m to this fund that will boost regeneration and economic development in Scotland's deprived urban areas.

"The Jessica fund encompasses a sustainable approach to regeneration by establishing an evergreen fund, by creating premises that will support economic growth, by focusing on land redevelopment and by supporting areas of social need.

"This fund can be recycled and reinvested and therefore provides a longer term contribution to economic development."

SNP Aberdeen North MSP Brian Adam also welcomed the funding package, which he said would help "strengthen" Scotland's economy".