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Financing smart cities

Pim van Ballekom, Vice-president of the EIB
‘Smart Cities & Sustainable Development’ is the name of the new programme, developed jointly by the European Investment Bank and Belfius Bank, to finance intelligent cities. A first in Belgium – and in Europe – which should enable communes to benefit from financing at reduced interest rates in order to progress towards the status of Smart City. The rules of the game have been set and the kick-off was given last year in June.

The challenges in terms of urbanisation are immense. According to a recent McKinsey report, by 2030 some 57 trillion Euros will have to be found to create and maintain roads, electricity power plants and pipelines. But the Smart Cities programme is based on local statistics: more than 70% of Europeans live in urban areas, a proportion which is as high as 98% in Belgium! And there is another worrying reality: in developed countries the public authorities should devote 4% of their GDP to infrastructure. In Belgium, this proportion is only 2%.

This demographic concentration is considered to be a source of challenges in the cities, which generate almost 85% of the GDP, but consume 75% of the energy produced in order to do this and are responsible for 80% of CO2 emissions.

It is within this context that the Belgian-European ‘Smart Cities’ project is positioned, a project which claims to be ‘sustainable and intelligent’. In practical terms, the 589 communes and cities of Belgium can, from now, obtain financing at reduced interest rates. The credit line is available to public authorities and to others, but always for
the benefit of the local administration. This preferential rate financing is being made available by the European Investment Bank (EIB) and Belfius, and involves a total of 400 million Euros. The two banks are each contributing 50%
of this.

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 | 18-05-15


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