201302-27_cr_ateliertravailmarseillereseau_eng

Summary – Preparatory working session of the Yearly Conference 2013 Network of urban Operators (CMI / EPAEM / CDC)

Feb. 27th

, 2013 – Preparatory working session for the yearly conference

Network of Urban Operators (CMI / EPAEM / CDC) 1

Preparatory working session for the yearly conference for the Network of Urban Developers

February, 27th 2013, EPA Euroméditerranée, Marseille Editor of the document : CJ

Working group :

Representative Contact details

French Development Agency (AFD) - PROPARCO

Hatem CHAKROUN [email protected]

European Investment Bank (EIB)

Lourdes LLORENS ABANDO [email protected]

World Bank - CMI

Mats KARLSSON [email protected]

French Caisse des Dépôts et Consignations

Jean COMBES [email protected]

Charlotte JACQUOT [email protected]

Didier BERNATEAU [email protected]

EPA Euroméditerranée

Franck GEILING [email protected]

LATTS

Pierre-Arnaud BARTHEL [email protected]

Documents submitted to the working group

Network : the Network’s presentation and objectives, roadmap ; concept note (Fr/En) for the

next yearly conference of the Network;

EIB : presentation of an experience in the financing of urban development in Egypt (LADIs) ;

presentation of the existing financing processes and tools in the urban field;

LATTS : sustainable urban projects in the Mediterranean : innovative aspects, key factors for

success for the financing and the implementation of complex urban projects consistent with the

needs and issues of the metropolis in the Mediterranean region.


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Introduction

The CMI 2.0 and its « Urban Hub matrix »

The CMI Annual Meeting (November, 28th

2012) officially kicked off the CMI second mandate. The

CMI opts for a more integrated approach and continues its close collaboration, not only with the

international financing institutions (IFIs) but also with the governments from the South, active

partners of the CMI’s activities.

The CMI aims for the development of capacities of the southern Mediterranean countries (in terms

of decision making, knowledge sharing, etc) through the development of exchanges on technical

fields. The activities are now organized on three integrational themes : Integrated Economies,

Sustainable Growth and Participatory Governance. The « Urban Hub » is a cross sectoral topic.

The Network of Urban Developers (CMI, EPAEM, CDC) is one of the multi-partnership initiatives lead

by the CMI. It benefits from the convergence of interests of urban developers from the

Mediterranean. The CMI reiterates its support to the Network and its activities.


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EPAEM : the Network’s objectives

The idea of the Network of Urban Developers arose at the 2009 Urban Symposium. The initiative

started from the desire to get a better knowledge of large urban projects and urban dynamics at

stake in the southern and eastern rims of the Mediterranean. The aim of the Network is to :

• highlight the diversity of approaches and methods for urban development;

• identify consistent solutions to the issues of urban development in the Mediterranean;

• propose knowledge sharing activities on technical, operational subjects, to develop

sustainability, attractiveness and value creation in Mediterranean metropolis.

This Network of Urban Developers is a network of professional actors, strongly linked to the

International Financial Institutions partners of the initiative.

A yearly conference will be organized. Twice a year, the Network will also propose professional

workshops on technical themes, including the visit of pilot projects and the meeting of local

developers and planning authorities. The Network will also publish conferences and workshops

proceedings, an annual agenda and a newsletter about sustainable urban development in the

Mediterranean.

The college of urban developers has to be rebalanced so as to better represent the private

developers. The Network is also looking for new memberships in the Mashreq.

The Network will pay a great attention to the development of exchanges between the two colleges

of the Network (IFIs, Developers), for an increased knowledge of the developers needs and a better

coordination of the IFIs’ actions in the urban field.

The next yearly conference of the Network

The topic of the next conference is « financial engineering of complex urban projects », focusing

on:

• The financial processes and institutional/planning organizations to be chosen so as to create

a leverage effect for the implementation of large, sustainable urban projects consistent with

the need of the future users;

• The experiences of International Financial Institutions (IFIs) in innovative processes and

methods for the efficient implementation of sustainable, large urban projects.

The end users solvency is emerging as a major issue to ensure the effective connection of urban

projects with their future users (inhabitants, economic actors). Thus, the yearly conference of the

Network will explore the potential contributions of the future users to the financing of sustainable

urban projects (“building cities for all”).


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Other aspects has to be associated in the debates of the next conference. The following issues might

be developed to question the management and the implementation of sustainable urban projects

(“sustainable” as “cities providing an access to everybody and supporting value creation and

economic growth”) :

• The operational processes. For example, leverage effect through equalization, dedicated

tools to reinvest the profits from sales in the financing of urban facilities or infrastructures;

• The links between financial and operational aspects in complex urban projects. For

example, how the project management model and the stakeholders’ organization for the

definition and the implementation of a urban project might create a leverage effect to

facilitate the operation of the urban facilities planned by the developers.

The yearly conference should be a place to explore the links between the needs of the developers

for the financing of large, sustainable urban projects, and their operational frameworks and tools.

This conference should contribute to enhance the security of the IFIs’ investments in the urban

development field. It should also facilitate the efficient interconnection of the IFIs’ actions on the

ground.

Identified topics for the yearly conference :

1. Promoting mixed urban projects (project management at operational stages creating mixed

land use environments, communities of users & inhabitants to support land carrying costs,

self-help housing projects);

2. Reinforcing the developers’ capacities for the management of sustainable urban projects

(methods and tools to link the institutional organization of a project and its business model);

3. Planning the “real” green city (processes and methods to reduce building and maintenance

costs, consistent urban design and eco-technologies with the local contexts and needs);

4. Integrating urban projects in metropolitan policies and urban development;

5. Shaping sustainable cities with urban services operators and end-users (pre-financing and

early operator involvement in urban project cycle).

The actions in the urban field at the European Investment Bank

The EIB aims to develop its intervention on integrated urban projects. The EIB has little experience

in the financing of integrated urban projects. Several studies has been recently launched (UPFI,

Medinas 2030) and will provide substantial data and information on urban projects and their needs

for technical assistance (project preparation and implementation unit).


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The EIB generally analyses the following aspects for the identification and appraising of urban

projects:

• Infrastructure

• Housing

• Cultural Heritage

• Space / place: integration of the project in the dynamics of the metropolis (consistence with

strategic urban development plans, planning framework, proposed scenarios)

• Institutional framework for the sustainability of the project: identification of institutions to

guarantee the efficient implementation and the easy operation of the project

• Economy: job creation, SME local development…

The EIB’s actions in the integrated urban field are based on the institutional organization in place in

every country. The EIB adapts its interventions regarding every national and urban context.

The EIB is now looking for pilot projects readily implementable and whose critical mass will generate

direct impacts on urban space (the EIB is looking for cross-subsidy and equalization effects).

For example, the Egyptian project “Community Development”, led by the EIB, is based on a

dedicated method for the implementation of integrated urban projects:

1. Criteria for the identification and selection of a group of urban projects;

2. Technical Assistance through the Social Development Fund (SDF), whose network at the

national scale and in the metropolitan area facilitates actions on the ground (better flexibility

than governmental institutions). The SDF, mostly dedicated to the support to SME and

microcredit, has to develop a methodology on urban aspects. The technical assistance is

financed by the European Commission.

Though EIB believes that the institutions in place are well-sized for its action in the urban field, the

“Community Development” project now suffers from the arbitrary present context with Arab Spring.

The French Development Agency and urban development

A toolbox dedicated to urban developers and IFIs should be created by the Network to reflect the

existing reality of urban development in the Mediterranean and its diversity. This toolbox could

provide best practices, categorized solutions to operational issues, and the collection and developers’

experiences on integrated urban projects supported by the IFIs.

The aim is to benefit from the IFIs’ feedbacks based on their experience in the urban field in order

to facilitate the implementation and the operation of large urban projects. The AFD mentions the

new city project of Tamesna (Morocco), whose developer – Al Omrane – has to take the unexpected

mission of backing the project as a town manager due to the lack of capacities of local authority (links

between the new city and the existing urban space, political support and institutional backing of the

new city once it has been built and sold by the developer).


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Thus, the next yearly conference of the Network has to be shaped with a strong connection to the

needs of the urban developers.

Contrary to the EIB, the French Development Agency do not finance dedicated structures or

operators for the implementation of urban projects. The AFD mostly provides a support to

authorities and project managers and works with local authorities or national institutions for the

reinforcement of their capacities (for example, assistance to governments in their topics for

consideration regarding urban development matters). Technical Assistance is hardly provided.

Poverty reduction strategies and accompaniment of poor people are two prior topics for the AFD.

The role of the French Caisse des Dépôts et Consignations

in the urban field

According to the CDC, urban development projects’ main objective is value and job creation. The

French CDC interacts with local Caisses des Dépôts among other things for technical cooperation

actions (increased security of urban projects’ bankability, assistance in job creation and sustainable

economic development).

For instance, the French CDC is providing assistance to:

• Nouadhibou urban project, Mauritania : first limited to the restructuration of fishing industry

in Nouadhibou, the project had soon to integrate global urban matters as reorganization of

local economic actors on this urban perimeter (local employment, integration of informal

activity, building and operation of infrastructures and facilities to be created to support the

urban development…);

• In Dakar, the intervention of the CDC, starting from an assistance on real estate

development, finally led to integrated urban considerations (accessibility, facilities, urban

services).

Debate: Urban projects management

The management of complex urban projects on a long-term basis

Thinking about new cities projects, the working session highlighted the necessity of a long term

backing of urban projects, supported by an adequate governance and institutional framework. This

institutional framework should be able to operate the new cities projects once the operational

implementation has been done, regarding the generally belated capacity of public authorities to

operate and maintain the new cities (ex: the public authority of Marne La Vallée New City, France,

acted not only as the developer of the project, but also as the town manager for many years).


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Linking the urban projects’ institutional framework and business model

El Gouna urban project (Orascom, Egypt) raised many questions regarding the institutional

organization to be chosen in order to properly back the project for its operation and maintenance.

Finally, the operation of urban services has been integrated in the missions of the developer

(Orascom, as a town manager), with a business model in which inhabitants contribute to the running

and maintenance of these services through a tax system.

Focus: EIB intervention in Egypt

The EIB’s objective is to give capacities to the Egyptian government to support its sustainable urban

development. To help in this project, the EIB selects existing local institutions and developers to act

in the urban development field. In the Egyptian case, the Social Development Fund has been selected

to help Egypt to control and properly manage its urban development.

A unit in charge of the selection and the implementation of the bankable projects has been created

for every area in which urban growth is particularly consistent and in which potential for investment

exists : the LADI (Local Areas Development Initiatives). LADIs only consists in spatial perimeters (they

do not represent any institution backing up urban projects, as land or real estate developers).

The business model of every urban project depends from the institutional framework created by

the stakeholders. The Egyptian case reveals that the EIB is taking into account the inherent

complexity of urban development projects in the metropolis (employment, microcredit, SME/SMI

assistance, affordable housing, etc). But the back-up of urban projects by dedicated developers in

Egypt should also to be planned by the EIB, in order to increase the security of the projects’

implementation and their financing. Which institution will be in charge of the building of

infrastructures ? which stakeholder would carry every urban project once the lots has been granted

to real estate developers ?

The EIB proposes Technical Assistance for the creation of urban authorities or institutions, or

technical operators (through European Commission’s loans). In the Egyptian context, from the EIB

viewpoint, job creation might generate revenues to finance part of selected urban projects.

Pierre-Arnaud Barthel, LATTS: design, implement and operate

large urban projects in the Mediterranean

The Mediterranean region entered an era of urban mega-projects financed by investors from the

Gulf (example : “Mediterranean Gate” project, Tunis, with Sama Dubai), whose design and program

are highly disconnected with sustainable integrated urban development matters and definitely non-

consistent with the needs of local populations (inhabitants, economic actors, etc). These urban

projects now become scarce, whilst the necessity of creation of sustainable cities is growing stronger.


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Several key elements for a successful design and implementation of urban projects may be identified

by the IFIs in their analysis :

• Given that many urban project owners only play the role of land developers, a prior issue is

to help project developers building capacities for the follow-up of urban projects once the

land is sold. Setting the rules through memorandums of understanding or contract notices

allows the urban project developer to manage the project in operational stages (negotiation

in the sales of building rights, materials selections, energy efficiency targets, % of affordable

housing…)

• Prior to the start of the project, integrating the contextual dimension of the project is

essential: choice of a urban project developer and its positioning, relevant perimeter of the

project, consistence of the program regarding the local needs, appropriate linkage between

urban infrastructures and the project, etc.

Contractualization between the urban project developer and other stakeholders (real estate

developers, urban services managers…) might be a key factor for success. A list of documents

(charters, contract documents with environmental specifications, technical notices and programs)

have to be established and signed by all in order to facilitate the definition of a multi-stakeholders

governance for the implementation of complex urban projects.

Urban project developers in the Mediterranean usually report these blockages and limits :

• Lack of political involvement and accountability;

• Constraints in terms of urban project management (urban developer capacities)

• Deficit of linkage between project and local/national urban policies and sectorial/financial

tools (housing, transportation documents at city scale);

• Hence in zero-risk projects, with maximum rate of return on investment (example : Casa

Marina in Casablanca, NUCA and the inflationist system based on auction for land sells,

without consideration to expect from the real estate bodies for the urban project developer).

These constraints highlight the need to design an adequate financial engineering for the

implementation of sustainable, large urban projects. Financial tools for the project might be linked

to national or local banking systems or to the IFIs funding, according to the needs and the progress of

the urban project.

Financing the « real » sustainable urban projects

The key issue is to lend credibility of a « sustainable urban development » approach, at the

opposite of inappropriate development strategies, costly eco-techologies or non-relevant

environmental performance requirements, lack of business studies targeting end-users and local

needs, or weaknesses in the projects’ institutional organization (linkage between stakeholders) and

in the progress of the project at operational stages.


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Design urban project in strong connection with the needs of the end-users and the needs of the

city for its sustainable development

Urban developers in the Mediterranean have designed several interesting « green city » projects (P-A

Barthel, scoping study on innovative, sustainable city projects in the Arab World, French Ministry of

Foreign Affairs, 2010). Several limits to these innovative projects have been pointed out, as the

creation of eco-friendly enclaves dedicated to an imaginary eco-bourgeoisie, disconnected to local

needs and increasing urban fragmentation.

Business models of urban projects cannot be disconnected from economic issues (links with real

estate bodies, other stakeholders…) territorial (control over the project definition and the urban

design) and societal issues.

Designing sustainable urban projects for all

The general design and the program of an urban project connected to the local needs rely on :

� The strategy of the developer and its solvability : the aim is to identify, for every mission

taken by the developer, the processes and tools providing funds to finance the

implementation and the maintenance of the urban project (expect a higher leverage effect

through cross-subsidies by selling the most attractive lots at higher prices, to finance the

building of urban facilities and affordable housing);

� The credibility of the project : major issues may be the design of the project and its program

so as to link the urban project with the existing urban space, to develop partnering

relationships between the developer and the other stakeholders of the project (especially

with the public / planning authorities);

� The design of the project in partnership with donors, banks, end users to create more

affordable and non-fragmented cities: regarding housing strategy for example, urban

project developers may create leverage effect through operational engineering processes.

These processes could be adjustments tools in the selling of building rights, cross-subsidies,

or methods to ensure the solvency of end-users (mortgage, dedicated loans…).

Other operational engineering processes aiming at creating cities for all and targeting the

solvency of end-users are: community based initiatives for the support of land carrying costs,

self-building housing methods, etc.

From the working session to the annual conference: debate

Urban project as a tool for the urban development dynamics and policies

Debates about the links between the perimeter of urban projects and the urban development

dynamics at city scale may take place in the events organized by the Network of Urban Developers.

Several public policies cycles took place in Europe and now occur synchronously in the

Mediterranean. This context contributes to the specific character and the complexity of urban

development issues in the Mediterranean.


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Franck Geiling recalls that the institutional metropolitan and national context of Euromediterranée

urban project is similar as those experienced in developing countries: high limits regarding the

institutional and political framework, economic constraints… Thus, the objective was to design an

urban project as a vector for the whole metropolitan development. Euromediterranée urban project

contributed to a better linkage between the developer (EPA) and local authorities. This higher

involvement of local authorities facilitated the efficient implementation of the project (convergence

of all the stakeholders around common objectives and on the ground, end of the public authorities’

prevailing sectorial and handout logic).

The institutional framework of Euroméditerranée urban project led to kind of a mediation between

public authorities with distinct perimeters, divergent objectives and logics for action, and with the

departments of Euromediterranée authority.

This partnering relationship has not been experienced yet on other projects in the metropolitan area.

Designed as an alternative to the traditional planning activity, this institutional context of

Euromediterranée expresses the necessary flexibility for the management of complex urban projects.

Build the « real » green city in the Mediterranean

“Low cost easy tech” innovative building method, experienced by Euroméditerranée, aims at meeting

the environmental requirements (urban space quality, eco-technology building targets) without

increasing the costs of the project. It is based on traditional building characteristics in the

Mediterranean for the buildings and at the city scale (street orientation, ventilation…). It mobilizes

materials and resources avoiding increase of the building, operation and maintenance costs.

The AFD and Al Omrane (Morocco) developed a high environmental quality method (materials,

orientation, etc) consistent with the sustainable building methods in the Mediterranean. The AFD is

financing Al Omrane for the development and the implementation of this initiative.

201302-27_cr_ateliertravailmarseillereseau_eng

Documents

urban dynamics

urban symposium

financing of urban development

sustainable urban projects

working group network

urban field latts

urban hub matrix

network eib