The regulatory framework for JESSICA requires that contributions from Structural Funds be recycled16 . Recycling of funding is expected to occur at the level of the Holding Fund and/or UDF. JESSICA funds must be invested in eligible project expenditure before the expiry date of the Structural Funds programming period (n+2, i.e. by the end of 2015). Any returns/receipts generated from that investment can be either retained by the UDFs or returned to Managing Authorities for reinvestment in new urban regeneration projects before or after the expiry of the n+2 or n+3 (as the case may be) period17. In addition it is recommended that returned resources be re-used in the region(s) covered by the Operational Programme and that re-use should be through financial engineering instruments, with a view to ensuring further leverage and recycling of public money18. As explained by the Commission, provision for the recycling of funds applies only to the amounts contributed by the MAs to the UDF and not to private co-financings19.
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16 Article 78(7) of Regulation (EC) No 1083/2006 expressly provides that "resources returned to the operation from investments undertaken by funds as defined in Article 44 or left over after all guarantees have been honoured shall be reused by the competent authorities of the Member State concerned for the benefit of urban development projects...".
17 EIB, JESSICA: A New Way of Using EU Funding to Promote Sustainable Investments and Growth in Urban Areas, 2007.
18 COCOF 08/0002/01-EN.
19 COCOF 08/0002/01-EN.