Regeneration – an integrated process of activities undertaken in the spatial, social and economic dimensions – should lead to the improvement of the living conditions of inhabitants of degraded urban areas. The European Union in 2007- 2013 allocated financial resources for this purpose in the form of JESSICA initiative which is based on financial engineering mechanism. Experiences gained so far allow conclusions to be drawn that JESSICA is a highly fi nancially-effi cient instrument but, however, not always delivers the desired outcomes in the spatial and social sphere. The scope of projects often is limited to infrastructural investments and does not reflect the complexity of regeneration process. In the article the authors analyse experiences of the five Polish regions with the use of JESSICA, point out main problems and formulate recommendations for sustainable urban policy.
JESSICA initiative as a financial engineering instrument was introduced to enhance and accelerate investments in disadvantaged urban areas. The novel aspect of JESSICA is that this instrument should not only support and promote sustainable urban development but also provide incentives that lower risk capital investments and consequently allow to overcome existing market failures. Thus, the paper aims to identify whether JESSICA projects have contributed to generating positive market effects, as well as to indicate the factors that were most responsible for the occurrence of these phenomena. The results show that 75% out of all projects generated positive market effects in form of new jobs, services or products. The generation of revenues by particular project was the most influential factor determining the capacity of a given project to create positive markets effects.