Financing Brownfield Redevelopment

Brownfields in Baltic States - Lifelong Educational Project CZ/08/LLP-LdV/TOI/134005

Financing Brownfield Redevelopment

Barbara Vojvodíková

Daiva Velykienė

Edmunds Teirumnieks

„This project has been funded with support from the European Commission. This publication [communication] reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.“


Awareness • Funds usually come from a variety of

sources at various points in the regeneration process

• There are different types and ways to acquire money for brownfield regeneration

• To find out financing possibilities of brownfield redevelopment in Lithuania

• To find out financing possibilities of brownfield redevelopment in Latvia


Goals of the teaching unit

• Show main sources of financing brownfields regeneration

• Brief introduction to risks connected with brownfields project realization


Content• Money in brownfields regeneration - in

general

• Examples from the Czech Republic

• Examples from Lithuania

• Examples from Latvia


Main sources of financing

• private investors

• public sources

- state budget or funds

- municipal or regional budgets or funds

- EU funds – new tool JESSICA

• donations and grants from other funds and organizations


JESSICA Joint European Support for Sustainable

Investment in City Areas • It is a new tool for use of Structural Funds.

• It is a credit tool. The main idea lies in renting money to projects which lead to town development.

• Financial means from Structural Funds are invested by the leading organization into holding funds or directly into Urban development fund - This will take place in Lithuania via the funds established in the participating banks

• Financial means can be inserted into Urban development funds also by municipalities, European Investment Bank, Council of Europe Development Bank, commercial banks and other financial institutions.


Combination of sources

• advantages:greater chance to get loans

lower benefits are required

better flexibility during realization

• disadvantage:more complex project preparation


Methods of financing of brownfields

regeneration in the Czech Republic • They differ in sources of financing:

- private recourses, - public budgets,- EU resources.

• They differ in the aim: - at regeneration of old industrial areas and their

revitalization,- removal of old ecological burdens,- removal of mining consequences.

or

- environmental- economical- urban development


• The owner or user of activity is responsible of impact to environment and human health made in the process of the activity.

• All the damage made to environment must be recovered according to the principle of ‘Polluter pay’. Therefore, the owners or polluters must remedy contaminated sites and developed derelict buildings using their funds.

Private finances in Lithuania


State funding in Lithuania

• There are a lot of historical contamination and ownerless abandoned buildings in Lithuania, so county and municipal administrations are responsible for the liquidation of construction and environmental clean-up.

• Since 2006 the government annually provides about 2 million Lt for municipalities and counties to finance construction clean-up operations.


Projects in Lithuania supported by EU funds(1)

The measures of 1 priority 4 task of Cohesion action program

• 3 measure – ‘Protection of biodiversity and landscape’. Supporting areas: 1. ... 6. Liquidation of abandoned (ownerless) buildings and other objects harmful to the environment. Applicant: State Service of Protected Areas (330 million. Lt.).

• 5 measure – ‘Impact assessment of contaminated sites’. Supporting areas:

– Inventory of contaminated sites (CS)

– Risk assessment of CS, treatment setting of priorities in the light of those real negative effects on human health, groundwater and surface water, ‘Natura 2000’ and others protected areas.

– The preliminary eco-geological investigations on the priority areas and eco-geological research in areas dangerous to environment and human health.

Applicant: Lithuanian Geological Survey(5 million. Lt.)



The measures of 1 priority 4 task of Cohesion action program

• 6 measure – ‘Historically contaminated sites’.

Supporting areas: • Surface contamination assessment of research or study performance.• The necessary documentation preparing of CS rehabilitation. • Remedy of CS (significant improvement in the state) from petroleum

products, pesticides, etc.. environmentally hazardous materials.

Applicant: Municipal Administration (62,996 million. Lt).



• The European Regional Development Fund under the general support documents (SPD) measure 1.3 ‘Environmental quality improvement and environmental damage prevention’. The main objective - to reduce water, air and soil pollution and its potential threat to Lithuanian regions, to ensure the public's right to a safe and clean environment, to avoid the farming and other activities harmful effects on the environment (or lower), while maintaining the sustainable use of natural resources and the formation of a responsible Public attitudes to the natural environment.

• These measures include the following operating groups: – Setting of historical pollution and its clearing, with the support of two activities:

management of CS, including their remediation and necessary equipment purchase;

environmental clean-up of harmful substances from rivers, streams, lakes and valleys.The implementation of projects in these regions will become more attractive for economic development. Total on the activities of the group was signed 35 grant agreements (for the support of 19686905.21 Lt.).


Financial aspects in Latvia

Main possible sources of financingsources of financing:• State funding• EU Structural funds, e.g. European

Regional Development Fund (ERDF)• Bank loans• Private finances


Investments in brownfields

• The environmental investment projects in Latvia are aided by the World Bank, The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Nordic Environment Finance Corporation, the Nordic Investment Bank (NIB).

• The coordination of diversion of loans from these financial institutions to prior environmental investment projects is responsibility of the Ministry of Environment.


Supported actions1. Elimination of pollution source;2. Remediation of polluted area;3. Utilization of pollutants extracted during

remediation.Applicable costs:Applicable costs:1. Project development and project

management up to 10% of applicable costs,

2. Construction works,3. Deliveries of facilities and equipment.


Remediations priorityRemediations of 1st category polluted sites are to be considered as a priority. From the environmental protection point of view it is more important to remediate those historically polluted sites where pollution presents higher level of hazards:– the highest level of concentration of pollutants, – the biggest area,– pollution or its spread endangers valuable nature

objects or residential areas.


The Latvian Environmental Protection Fund

LEPF - is state funded program which announces project tenders in agreement with project guidelines for funding and organizes project assessment according to decisions of Fund’s board. Projects of the state budget subprogram “Environmental protection projects” are implemented by societies, foundations, local governments, businessmens and individuals.


Remediations priorityRemediations of 1st category polluted sites are to be considered as a priority. From the environmental protection point of view it is more important to remediate those historically polluted sites where pollution presents higher level of hazards:– the highest level of concentration of pollutants, – the biggest area,– pollution or its spread endangers valuable nature

objects or residential areas.


The reasons of brownfields existence in Latvia are:

• A socio - economic factors - the lack of resources, which prevents to renew the historical housing development

• Indetermination of common Development strategy in municipalities

• Locations of polluted territories in private estate

• Limited resources for polluted site remidiation• Incompleteness in state legislation


Conclusion• Financing brownfields have many different way –

diversification of sources is necessary• Projects on brownfields bring many unusual

risks but these risks can be eliminated• Financing sources of contaminated sites

redevelopment possible in Lithuania and Latvia• Main projects allocated money from EU

structural funds and the national budget in Lithuania and Latvia


Thank you for your attention

http://fast10.vsb.cz/[email protected]@stud.ktu.lt

[email protected]

„This project has been funded with support from the European Commission. This publication [communication] reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.“

Financing Brownfield Redevelopment

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