Towards A Joint Investment Programme For Europe’s Smart Cities: Three Years On, Are We Getting There

04.04.2019
By Marketplace Editorial
EIP-SCC news

Towards A Joint Investment Programme for Europe’s Smart Cities: Three Years On, Are We Getting There

Three years after EUROCITIES took over leadership of the EIP-SCC’s action cluster on Business Models, Financing and Procurement for Smart Cities, we speak to the Chairperson, Bernadett Köteles Degrendele. Are we any closer towards a joint investment programme for Europe’s cities to become smarter? 

We are living through a historical moment when our youth is marching on the streets for a better policy to save our climate. Cities, businesses and the financing community all agree with the European Commission on moving “Towards a joint investment programme for European Smart Cities” and committed to meeting regularly to define common actions. 

This journey started long ago but there are now new ways of thinking and working, especially working in collaboration instead of in silos or even competing with each other. EUROCITIES, a city network of over 140 European cities, is heavily involved in facilitating this change. Exactly three year’s ago in March, EUROCITIES took over the lead of the EIP-SCC’s action cluster on Business Models, Financing and Procurement for Smart Cities (AC BM), further promoting change. 

Bernadett Köteles Degrendele, Chair of the action cluster and Project Coordinator of Smart Cities at EUROCITIES looks back on the achievements of the last three years and shares why this is truly a unique process. 

What  Motivated EUROCITIES to Lead on the Action Cluster back in 2016?
EUROCITIES saw the opportunity in this action cluster, to quote knowledge sharing director Nathalie Guri, to: “become a sounding board and a megaphone for cities interested in pursuing a results-oriented and constructive dialogue with industry and the private sector. I believe the cluster’s ultimate goal should be to make certain that the smart city agenda is driven by cities’ needs.” 

EUROCITIES works on many fronts and very closely with cities helping them build capacity and shape the market. The industry is getting to the point where it is more willing to be flexible with offers to the cities, and this is especially true when they act in coordination. Putting together the needs of cities and having a dialogue with an industry receptive to those needs is crucial. This is what we collectively planned to achieve with the EIP-SCC’s action cluster on business models, which helps cities create new integrated business models through innovative local partnerships. 

What Have You Achieved in the Last Three Years? 
Being involved in the EIP-SCC, the Covenant of Mayors and the Urban Agenda are key to the success of EUROCITIES. Through our close collaboration, we were able to host a debate with stakeholders from cities, industry, investors and the Commission at the recent Covenant of Mayors Investment Forum. Top of the agenda at this year’s Forum was the publication entitled “Towards a joint investment programme for European smart cities” and 10 key areas for ongoing action. Such events create space for all of us to ensure our actions are aligned and help us support cities going forward. 

Over the last three years, we have also been able to bring expert-level discussions within the remit of the action cluster (AC), which has proved to be an excellent platform to promote and share ideas. We have also brought a number of relevant initiatives to the AC’s table. These include projects such as PROSPECT H2020, which is a peer-to-peer learning programme for about 150 cities and regions, which focuses on supporting and replicating successful innovative financing models for energy efficiency projects.

Another key achievement has been the Matchmaking activity that we helped the EIP-SCC to organise. Matchmaking supports city project promoters with financing by bringing smart city projects closer to investors. Organised in three phases — Explore, Shape and Deal — these activities allow participants to discover previously successful projects, shape new ones, engage in dialogue with financiers and hopefully clinch a deal to implement the project. Cities have to have better quality projects to which investors can say ‘yes’, and this is in our joint interest. The Matchmaking activities have made this possible. 

Working together with the EIP-SCC under the action cluster has offered several opportunities over the last three years via a range of activities, workshops and events but there is obviously more to be done. 

What are Cities Doing to Attract Investment and Work with the Market?
This new way of working is putting citizens at the centre of the climate change policy, with the city acting as facilitator, simply guiding the collaboration. Unlike national or European level, the proximity of local governments to those whom their policies affect puts cities in an opportune position to nurture citizen-led governance. 

The recent Covenant of Mayors Investment Forum showcased a number of best practice activities that certain cities have embarked on. 

In Cluj-Napoca, for example, the ingredients to innovation and becoming a smarter city are working with university, researchers, companies. The city started early on to look into how these relationships can be turned to its advantage. Working together with these actors, the city co-authored a vision that fed into its joint investment plan. 

San Sebastian Donostia, meanwhile, dared to lead on a dialogue with companies and present its needs so businesses could respond better. The city formed a local smart cluster that strives for a win-win approach: when businesses can identify the most pressing needs of clients, and clients comprehend the constraints upon businesses, both parties are better off. San Sebastian has implemented several projects in consultation with this smart cluster.
Thinking carefully about different kinds of investment mechanisms is key to innovation — this doesn’t mean creating something from anything. In Italian municipalities, local governments identified pension funds as investment sources that are naturally long-term, and low-risk. This is perfect for investment in activities like building retrofit or district heat networks, which are known to produce long-term gains. 
The message to investors is clear: Cities understand local needs. They do not want off-the-shelf solutions but are happy to work together with markets and other stakeholders in co-creation to integrate projects in a meaningful way, while addressing the needs of their respective cities. 

For more information about the Matchmaking activities within the EIP-SCC Marketplace please see www.eu-smartcities.eu/matchmaking.