Regeneration investment fund evaluated
Thousands of jobs created.
An evaluation of a decade long regeneration fund shows major social, economic and environmental benefits across Scotland as well as the creation of more than five thousand jobs.
The Scottish Partnership for Regeneration in Urban Centres (SPRUCE) fund, originally set up using the European Regional Development Fund (ERDF), provided commercial loans to infrastructure and energy efficiency projects.
The evaluation found:
- SPRUCE achieved strong leverage with £425m of capital invested from third parties through the process. The total development cost of the projects supported exceeded £519.1m with SPRUCE providing 26% of the total funding requirement
- The fund supported 18 urban development and energy efficiency projects which delivered a range of social, economic and environmental benefits across Scotland which would not have happened in the timeframe had SPRUCE funding not been available
- More than 5,100 jobs were created
- 88 enterprises supported
- More than 100,000 square metres of business space created or modified under the BREEAM classification
- Around 11,000 tonnes of CO2 savings delivered from Biomass projects in Glasgow and St Andrews
SPRUCE initiatives included facilitating the major Haymarket development in Edinburgh, as well as energy efficiency projects such as the 40GWh Guardbridge Energy Centre project, a biomass plant and heat distribution network developed by St. Andrews University at Guardbridge, Fife.
On a visit to the 1 New Park Square office building in Edinburgh, a project sponsored by Parabola and part funded by SPRUCE, Minister for Local Government Empowerment and Planning Joe FitzPatrick said:
“The SPRUCE fund has created thousands of jobs and the total project development costs of more than half a billion pounds has delivered new infrastructure, supported the economy and transformed our communities for the better.
“Despite operating during a very challenging period, which covered the recovery from the financial crisis, Britain’s departure from the EU and the COVID pandemic, it is clear that SPRUCE contributed significantly to Scotland’s economic strategy.
“The impact of some of the projects has enabled wider regeneration of areas which otherwise would not have happened in the absence of SPRUCE. The Guardbridge project in St Andrews is a good example of this.”
Richard Paton, Investment Director at Amber Infrastructure said:
“Since its inception SPRUCE has proven to be a powerful funding tool that has addressed market failure in the availability of bank finance for 18 significant infrastructure and energy efficiency projects across Scotland.
“The findings of the evaluation report published today demonstrate the significant and widespread success of the SPRUCE fund across a variety of economic and socio-economic indicators.
“The projects funded by SPRUCE and the crowding in of private sector equity financing to the local areas benefitting from these interventions will continue to deliver regeneration and energy efficiency benefits for many decades to come.”
Background
The SPRUCE 10 year investment period ended in November 2021 and the SPRUCE Investment Board asked EIB to commission an evaluation of the fund.
Until 31 December 2022, SPRUCE was managed on Ministers’ behalf under agreement with the European Investment Bank (EIB) and Amber Infrastructure (Amber), who were appointed by EIB to manage the investment process. The contract with EIB was officially novated on 31 December with Scottish Ministers replacing EIB in the current agreements which allow the current model to continue to operate with a service level agreement with Scottish National Investment Bank (SNIB) for the delivery of services.
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