Ta2011006%20ro%20ftf%20medinas%202030%20pre operational%20study%20final%20report%20 %20volume%201%20

Feasibility of the 'Medinas 2030' Investment Programme: Pre-Operational Study on the Rehabilitation of Historic City Centres (Medinas) in Southern and Eastern Mediterranean Towns TA2011006 RO FTF

FINAL REPORT VOLUME I – Medinas 2030 Investment Programme European Investment Bank

Date Status Client

28 Jan 2013 Final European Investment Bank / CDC

Contacts

David Sims, Pre-Operational Study Team Leader

[email protected], +20 122 3239270

Rolf Dauskardt, Pre-Operational Study Technical Director

[email protected], +31 (0)612506624

The study / technical assistance operation is financed under the FEMIP Trust

Fund. This Fund, which was established in 2004 and has been financed – to

date – by 16 EU Member States and the European Commission, is intended to

support the development of the private sector via the financing of studies and

technical assistance measures and the provision of private equity.

The authors take full responsibility for the contents of this report. The

opinions expressed do not necessarily reflect the view of the European

Investment Bank.

Cover illustration: Aerial View of Cairo Citadel with Darb al-Labbana Project

Area Highlighted (The Darb el-Labbanah Sustainable Development Initiative,

PDF presentation 2010)

// TA2011006 RO FTF Medinas 2030 Pre-Operational Study Final Report – Volume 1 English.pdf

Acknowledgements

The Medinas 2030 Pre-Operational Study was guided by the Medinas 2030

Scientific Committee:

Cristina Gutierrez-Cortines (Member, European Parliament) Chairperson

Abouhani Abdelghani (Directeur Général de l'Urbanisme et de l'Architecture, Ministry of Housing, Morocco)

Jellal Abdelkafi (architect-urbaniste, Tunisia)

Sémia Akrout-Yaïche (Directrice Générale, Association Sauvegarde de la Médina de Tunis)

Abeer Al Saheb (urban planning consultant, UNHabitat)

Rugile Balzekaite (Policy Officer, Policy and Trust Fund Division, EIB)

Ibrahim Chahrour (Head of Planning and Programming Department, Council for Development and Reconstruction, Lebanon)

Abderrahmane Chorfi (independent consultant, Morocco)

Nils Devernois (Chef de la Division Collectivités Locales et Développement Urbain, Agence Française de Développement)

Daniel Drocourt (Directeur de l'Atelier du Patrimoine - Coordonnateur du Programme des 100 sites historiques du Plan d'action pour la Méditéranée, Programme des Nations Unies pour l'Environnement/ Ville de Marseille)

Brian Field (Urban Planning and Development Adviser, REGU, EIB)

Guy Fleuret (Senior Advisor, Transport and Urban Development, UfM)

Christopher Graz (Project Manager, EuroMed Heritage)

Zeina Hariri (Economic Programmes Coordinator, Al-Darb Al- Ahmar Community Development Company-AgaKhan, Egypt)

Eugenia Kazamaki Ottersten (Head of Regional and Urban Development Division, REGU, EIB)

Lourdes Llorens Abando (Monitoring Officer, REGU, EIB)

Gerry Muscat (Urban Specialist, REGU, EIB)

Joan Parpal (Secretary General, Medcities)

Chantal Reliquet (Senior Urban Specialist, World Bank)

Ghassan Samman (Head of International Relations, Organisation des Villes Arabes)

Tina Wik (Architect, Visiting Professor, Sweden)

The Study was managed by members of the EIB Projects Directorate,

specifically Mr Guy Fleuret (now Senior Advisor at the Union pour le

Mediterranée), Mr Brian Field, Ms Lourdes Llourens Abando and Mr Gerry

Muscat. Substantial inputs and guidance was provided by the Caisse des

Dépôts et Consignations, specifically by Michèle Vignes, Maryse Gautier, and

Jean-Michel Zabiegala. Support was provided also by Yasmine Wazzi and

Ricarda Braun.


Several members of the European Investment Bank (Regional and Urban

Development Division, Policy and Trust Fund Division, and Projects

Directorate), EIB operations division and CDC provided inputs, in particular

Eugenia Kazamaky, Rugile Balzekaite, Michèle Vignes, Maryse Gautier, and

Jean-Michel Zabiegala.

Valued contributions were more than 70 professionals and experts attending

the CMI workshops held in Marseilles in April and November 2012, as well as

the overall intellectual contributions of Mateu Turro (Universitat Politècnica

de Catalunya) and Meinholf Spiekermann (Deutsche Gesellschaft für

Internationale Zusammenarbeit).

A large number of stakeholders and professionals from Morocco, Tunisia,

Egypt, Lebanon and Jordan provided invaluable support and information

during the country and Medina visits, including government officials, EIB

personnel, experts, investors, hotel proprietors, NGO members and others.

The comprehensive list of contributors to the study are found in Volume II of

the final report. The Médina 2030-Etude documentaire préliminaire (EIB,

2010) prepared by Jacques Rousset provided the essential foundation for the

study.


Acronyms

ADER Agence de développement et rehabilitation de la Medina de Fez

AFD Agence Française du Développement

AFESD Arab Fund for Social and Economic Development (Kuwait)

AKTC Aga Khan Trust for Culture

ARCE American Research Centre in Egypt

ARRU Agence de Réhabilitation et de Rénovation Urbaine / National

Agency for Urban Renewal (Tunisia)

ASM Association de Sauvegarde de la Medina (Tunsia)

ATO Arab Towns Organization

AUDI Arab Urban Development Institute

BCD Beitur Central District

BIDs Business Improvement Districts

BOT Build Operate and Transfer

CBO Community Based Organisation

CDC Caisse des Dépôts et Consignations

CDR Council for Development and Reconstruction (Lebanon)

CHUD Cultural Heritage and Urban Development

CIDs City Improvement Districts

CIERA Italian-Egyptian Centre for Restoration and Archaeology

CMI Centre for Mediterranean Integration

CoMun Commune-Municipal Network

CSDHC Centre for Studies and Development of Historic Cairo

DAI Deutsches Archaeologisches Institut (Cairo)

EIB European Investment Bank

ENP European Neighbourhood Policy

EU European Union

Euromed Euro-Mediterranean Partnership

FEDA Friends of Environment and Development Association (Cairo)

FADES Fund Arab pour le Developpement Economique et Social (Kuwait)

FTF FEMIP Trust Fund

FEMIP Facility for Euro-Mediterranean Investment and Partnership

GIS Geographic Information System

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

IFI International Financial Institutions

IFAO l’Institut Francais d’Archaeologie Oriental

JESSICA Joint European Support for Sustainable Investment in City Areas

JICA Japanese International Development Agency

MENA Middle East and North Africa

MHUPV Ministère de l’Habitat, de l’Urbanisme, et de la Politique de la Ville

(Ministry of Housing, Urbanism and City Policy) – Morocco

MOMA Ministry of Municipal Affairs (Jordan)

MOTA Ministry of Tourism and Antiquities (Jordan)

MSA Ministry of State for Antiquities (Egypt)

MSME Micro, Small and Medium Enterprises

NGO Non-Governmental Organisation

NIF Neighborhood Investment Facility


PPP(1) Purchasing Power Parity

PPP(2) Public Private Partnership

SCA Supreme Council for Antiquities (Egypt)

SCBA Social Cost Benefit Analysis

SFD Social Fund for Development (Egypt)

SME Small and Medium Enterprises

TA Technical Assistance

ToR Terms of Reference

UfM Union for the Mediterranean

UNDP United Nations Development Programme

UNESCO United Nations Educational Scientific and Cultural Organisation

UPFI Urban Projects Finance Initiative

URHC Urban Rehabilitation of Historic Cairo

USAID United State Agency for International Development


Table of Contents

Executive Summary 1

1 Introduction and Background to the Pre-Operational Study 12 1.1 Pre-Operational Study Objective and Terms of Reference 12 1.2 Study Scope, Team and Timeline 12 1.3 Study Methodology and Activities 14 1.4 Purpose and Contents of this Report 15

2 Analysis of the Medinas 18 2.1 The Five Countries and their Medinas of the Pre-Operational

Study 18 2.1.1 Definitions of Medinas and the Historic City Centres

Studied 18 2.1.2 Other Medinas within the Region 19 2.1.3 National and Urban Contexts in Morocco, Tunisia, Egypt,

Lebanon and Jordan 20 2.2 Overview of Current Conditions and Development Trends in the

Medinas 21 2.2.1 Population Composition and Changes 24 2.2.2 Housing in Medinas and Housing Market Trends 24 2.2.3 Property, Titling and Investment 25 2.2.4 Living Standards and Poverty 25 2.2.5 Conservation Conditions, Built Heritage and Adaptive

Reuse 26 2.2.6 Medina Economies, Tourism and Handicrafts 26 2.2.7 Traffic, Accessibility and Parking Problems 27 2.2.8 Public Infrastructure and Social Services 27 2.2.9 Insecurity and Criminality 28 2.2.10 Physical and Economic Integration of the Medinas within

the Larger City Fabric 28 2.2.11 Building the Knowledge Base of Medinas 28

2.3 Current Frameworks, Initiatives and Approaches to Medina

Conservation and Rehabilitation 28 2.3.1 Legal Frameworks for Medina Conservation and

Rehabilitation 28 2.3.2 Policies, Institutions and Management of Medina

Rehabilitation 30 2.3.3 Funding and Financing of Medina Rehabilitation 32 2.3.4 Overview of Past and On-going Rehabilitation Initiatives 33

2.4 Current Country Trends that may Impact a Sustainable Medinas

2030 Investment Programme 36

3 Value-Added and Rationale of a Medinas Investment Programme 38 3.1 Investment Rationale – Do Medinas Add Value to Cities and

Countries? 38


3.1.1 Authenticity value linked to tourism 38 3.1.2 Avoided costs of new buildings and infrastructure 41 3.1.3 Non-use value 41 3.1.4 Distribution of value 41

3.2 Specific Issues Regarding the Business Case for Medinas and

Capturing the Value of Medinas 42 3.2.1 Financial Return and Economic Return 43 3.2.2 Customization is Essential 43

3.3 Necessity to Capture the Economic Upside 45 3.3.1 Approaches for Measuring the Economic Value of

Rehabilitation and Preservation 45 3.3.2 Recommended Approach for Economic Evaluation During

Project Formulation and Assessment 46 3.4 Potential Value-Added of a Medinas Investment Programme 46

4 Proposed Investment Programme for the Medina 2030 Initiative 48 4.1 Strategic Approach and Guiding Principles 48

4.1.1 Strategic Approach 48 4.1.2 Guiding Principles 49 4.1.3 Programme Scope and Coverage 51 4.1.4 Rehabilitation potential of Medinas included in the Pre-

Operational Study 52 4.1.5 Medina Projects in the Pipeline 55

4.2 Proposed Investment Programme Components 56 4.2.1 Immediate Medina Project Investments Using Existing

Products (Relatively Quick Wins) 57 4.2.2 Creation of Basic Systems for Sustained Management and

Financing of Medinas (Short Term Sowing) 59 4.2.3 Rehabilitation Programmes Requiring Strong Institutional

Frameworks (Slow Wins) 61 4.2.4 Alternative “Bottom up” Financing Mechanisms and

Structures for Medina Rehabilitation (Redundancy) 65 4.2.5 Summary of Identified Projects and Relevant Financing

Instruments 73 4.3 Proposed Medinas 2030 Facility 77

4.3.1 Rationale for a Medinas 2030 Facility 78 4.3.2 Concept Design – Medinas 2030 Facility 79 4.3.3 Longer Term Potential for a Medinas 2030 Fund 83

5 Proposed Roadmap for the Medinas 2030 Investment Programme 85 5.1 Roadmap for Taking Forward the Medinas 2030 Investment

Programme 85 5.1.1 Phase One 2013-2014 (2 Years) Exploratory Phase 86 5.1.2 Phase Two 2015-2019 (5 Years) Expansion Phase 87 5.1.3 Phase Three 2020-2030 (11 Years) Consolidation Phase 88

5.2 Strategy and Guidelines for Rehabilitation Investment

Operations in Each Country 89 5.2.1 Morocco Strategic Guidelines and Roadmap 89 5.2.2 Tunisia Strategic Guidelines and Roadmap 93


5.2.3 Egypt Strategic Guidelines and Roadmap 96 5.2.4 Lebanon Strategic Guidelines 100 5.2.5 Jordan Strategic Guidelines 101

6 Documents and Reports 102

7 Annex 1: Case Studies 104 7.1 Case 1: Historic Cairo – Aga Khan Trust for Culture Historic Cities

Support Program (1997- 2012) 104 7.2 Case 2: Tunis – El Hafsia Project 105 7.3 Case 3: Tunis – The Oukalas Project 105 7.4 Case 4: Morocco – Agence de Developpement et Rehabilitation

de la Medina de Fès 106

8 Annex 2: Projects Identified 107 8.1 Morocco Project Pipeline 107 8.2 Tunisia Project Pipeline 109 8.3 Egypt Project Pipeline 110 8.4 Jordan Project Pipeline 111 8.5 Lebanon Project Pipeline 112

Tables

Table 1 Countries and Medinas Included in the Pre-Operational Study 12 Table 2 Typologies of Medinas 19 Table 3 Country Parameters (all monetary figures in current USD) 21 Table 4 Basic Makeup of the Medinas Included in the Pre-Operational Study 21 Table 5 Overview of the Main Characteristics of the Medinas included in the

Pre-Operational Study 23 Table 6 Legal and Institutional Framework for Medinas Rehabilitation 29 Table 7 Main Types of Rehabilitation Initiatives in Medinas and Historic

Urban Centres 33 Table 8 Prior Major Donor-Assisted Project in Medinas 35 Table 9 First Round Ranking of Pre-Operational Study Medinas According to

Sustainable Tourism Potential 40 Table 10 Distribution of Benefits from Types of Possible Interventions in

Medinas 42 Table 11 Scoring System for Assessment of Rehabilitation Potential 53 Table 12 First Round Prioritisation of Medinas by Rehabilitation Potential 54 Table 13 Initial Identification of Small, Discrete Rehabilitation Projects at

Relatively Mature Preparation Stage 58 Table 14 Initial Identification of Infrastructure and Public Domain Projects at

Relatively Mature Preparation Stage 58 Table 15 Investment Components, Financial Instruments and Types of

Rehabilitation Interventions 74 Table 16 Pre-Operational Study Project Pipeline and Financing Instruments 75


Table 17 Long List of Potential Partners and Co-financiers for the Medinas

2030 Investment Programme 82 Table 18 Prospective Medinas 2030 Partners and Co-Funders Active in

Urban Rehabilitation 83

Figures

Figure 1 Pre-Operational Study Methodology 15 Figure 2 Pre-Operational Study Workplan 17 Figure 3 Mediterranean Neighbourhood Region with the Selected Countries

and Medinas 18 Figure 4 'Nesting' of Medinas within the Urban Sector 52 Figure 5 Conceptual Model of Integrated Medina Rehabilitation via Public-

Private Partnership 65 Figure 6 Commodity-based Medina Rehabilitation Projects and Financing 67 Figure 7 Management Model for Historic Property Assets held by Awqaf /

Habous 68 Figure 8 Medina Improvement District Model 70 Figure 9 Conceptual Outline of Dedicated Medinas 2030 Facility 80

Pre-Operational Study Volume I Medinas 2030 Investment Programme 1


1 Executive Summary

Background to the Pre-operational Study

The Medinas 2030 Programme is an initiative conceived in 2009 by a number of partners led by the EIB. The

Pre-operational Study is a key component of this initiative investigating the rationale and interventions of a

future investment programme. The study Terms of Reference identifies the following objectives: (1) identify

a potential Medinas 2030 Investment Programme and estimate its value-added; (2) investigate and adapt

innovative mechanisms of financing to support rehabilitation operations that complement more traditional

means; (3) produce strategies for different types of rehabilitation operations and identify a portfolio of

potential operations; and (4) design a Roadmap, including a proposed timeline and key indicators for the

Medinas 2030 Investment Programme.

The study covered 17 Medinas and historic city centres in five countries (Morocco, Tunisia, Egypt, Lebanon,

and Jordan) and was guided by the EIB and a Scientific Committee. The study team comprised five team

members based in the region and in Europe, and inputs of various additional experts. The study was

conducted between March 2012 and February 2013, including field missions to all countries and Medinas.

Two meetings of the Scientific Committee took place, as well as two wider Medinas workshops.

Methodologically, the study adopted a practical approach with emphasis on the situation in the Medinas and

countries themselves, as a “bottom-up” understanding of trends, needs and possible investments.

Simultaneously, attention was placed on the initiatives, actors and financial mechanisms of potential

relevance to Medina rehabilitation. This “top-down” approach recognizes that the macro funding and

institutional context at the national and especially international levels is important for a viable Investment

Programme.

The reporting of the study consists of two volumes. In this report (Volume 1) the overall study findings and

the recommended Medinas 2030 Investment Programme are described. Volume 2 comprises the reporting

on the individual countries, Medinas and projects.

Analysis of Medinas

The analysis carried out in the 17 selected Medinas in five countries uncovered a wealth of information about

their conditions, heritage values, trends, and opportunities and constraints for focused rehabilitation.

First, it is apparent that the subject of Medinas and historic urban centres is a complicated one. All five

countries are Arab and predominantly Muslim and thus have a unifying cultural background, as do their

Medinas. Despite this commonality, historical and regional differences mean that today there is no unique

urban phenomenon that can be called the ‘Medina’ across the entire region. At least three urban typologies

are identified:

Type Description Examples from Study Sample

Classic Medina Well-defined medieval urban fabric / walled

or with vestiges of city walls / extensive

traditional markets (souqs) / high value

historic buildings / little vehicular

penetration / associated historic cemeteries

All five Moroccan Medinas

(Casablanca, Tetouan, Salé,

Meknes, and Essaouira), all four

Tunisian Medinas (Tunis, Sousse,

Sfax, and Kairouan), Historic

Cairo

Historic inner-city

centre

Traditional central city areas / vestiges of

medieval urban fabric / some traditional

markets (souqs) / some buildings of historic

merit.

In Lebanon, Tripoli, Al-Mina,

Sidon, and Tyre



Type Description Examples from Study Sample

Core of small

archaeological town

Cores of small provincial towns / mainly 19th

century / little traditional urban

morphology / immediate proximity to

major pre-Islamic archaeological sites

In Lebanon, Baalbek

In Jordan Karak and Jerash

Medinas and historic cities vary in size and nature. Populations range from less than 5,000 to 375,000. Some

Medinas are minor within the larger agglomerations (e.g. Historic Cairo represents < 2 percent of Greater

Cairo), while represent as much as 10 to 20 percent of the city population (e.g. Essaouira and Meknès).

The Medinas and historic town centres studied are a sample of a wider pool of Medinas and historic city

centres. The MENA region is rich in similar urban areas. For example, Morocco has 26 other Medinas than

the five studied. Algeria has many ancient city centres that could be considered classic Medinas, and Libya

has at least seven. In the Palestinian territories the ancient city centre of Khalil (Hebron) stands out, as well

as old cities in Gaza and Nablus. Finally, in Tunisia, Egypt, Lebanon and Jordan there are a number of smaller

Medinas and ancient town centres found in provincial towns.

Country contexts vary widely and most have been affected by the Arab Spring. Country populations range

from 4 to 85 million. All five countries have overwhelmingly urban populations and are becoming more so. In

annual GDP per capita terms Lebanon is by far the richest at US$ 15,600, and Morocco is the lowest at US$

4,800. In all cases tourism is an important but not overwhelming contributor to national income. Annual

GDP growth rates before the Arab Spring were good, but since then they have dropped dramatically,

approaching zero in some cases. This underlines that the Arab Spring has generated serious political

uncertainties that affect governance in most countries, has produced severe fiscal constraints on Medina

rehabilitation funding, has made direct private foreign investment difficult to attract, and has seriously

dampened international cultural tourism flows. These negative aspects are partly countered by the

considerable sympathy among external players for the Arab Spring, and also it is expected that most

negative impacts will disappear within the next two to three years.

One striking feature of classic Medinas in Morocco, Tunisia, and Egypt is a very significant decrease in the

Medina populations from the 1960s until now. This trend is very pronounced, and in many cases Medinas

have lost as much as half of their populations. The Medina populations continue to decline, or at best

stabilize, whereas the urban agglomerations in which they are located continue to expand, creating an

increased marginalisation of the Medinas at least in demographic terms.

The populations of Medinas and historic city centres are on average below national urban poverty indicators.

Some families, especially those living in inaccessible pockets and squatting in run-down buildings, can be

desperately poor and suffering from deplorable housing conditions. However, most Medinas still retain

elements from the lower-middle and traditional middle social strata, and there is such a variety of social

types as to defy simplistic categorizations across all Medinas.

The housing stock of Medinas is varied. Relatively few old residential structures of historic merit still survive,

and most are modest courtyard houses and apartments built or rebuilt/extended in the last sixty to eighty

years. Much of the older housing stock in Medinas has gone through a slow process of deterioration. Units

have been divided up for cheap rental, and owners have had little incentive to maintain their properties. The

result is a serious problem of derelict buildings and buildings liable to collapse. Gentrification in the Medinas

is rare. The well-known ‘Marakesh phenomenon’ has not extended much to other Moroccan Medinas, and

housing markets in the Medinas of other countries remain so far practically immune to this kind of demand.

The economies of Medinas are complex. Many Medinas have thriving tourist shopping or bazaar areas. In

some Medinas there are tourist restaurants, hotels, cafes and entertainment venues, and there are

indications that these tourist establishments are becoming more common. In some Medinas, outside tourist

areas commercial activities are in decline due to difficult access for customers and outside competition.

However some larger Medinas still offer higher-order and specialized retail goods and services that attract



clientele from the wider city. Small-scale manufacturing and artisanal production in Medinas, once an

important economic activity, is definitely in decline. However, in some Medinas workshops and small

industries still thrive. Traditional handicraft production in Medinas are, almost without exception, have been

in decline for decades.

Almost all Medinas and historic city centres suffer from traffic congestion and lack of parking. Many

municipalities have created peripheral parking lots and even in some cases multi-storey parking garages, but

the ever-increasing demand for space always exceeds supply. Circulation inside Medinas is mostly by foot,

although there is a trend towards increasing use of motorized two-wheeled vehicles. The pedestrian nature

of Medinas gives them a head start in sustainable urban development, which is a strength that should be

capitalised on.

One problem that is common for all Medinas, and which is a main obstacle impeding systematic

interventions, is the complex ownership status of properties. This is an important cause of the deteriorated

and even abandoned housing mentioned above. Few properties are registered and titled, and in most

ownership is confusing. Many private buildings have been sub-divided and re-subdivided informally, and

establishing clear ownership has definitely discouraged private investment in Medinas.

In both Medinas and historic city centres in the five countries various government agencies have made

tremendous efforts over the last twenty to thirty years to improve basic urban infrastructure and services in

the Medinas, to the extent that water, wastewater, telephone and electricity coverage is near-universal, and

there are very few public ways and spaces that are not improved. Services such as schools and health centres

are also adequate. There are pockets in some Medinas where wastewater services are poor and surface

drainage is insufficient.

Existing Frameworks and Efforts to Rehabilitate Medinas

In all five countries there are sets of laws, decrees, and amendments governing the protection of national

monuments, antiquities, and archaeological sites and specifying institutional responsibilities. There are lists

of specific sites and buildings that fall under such legal protection. However, in no country is there legislation

that specifically declares a whole Medina (or even part of one) as falling under such legal protection. This

legal and institutional framework is imperfect, since in no cases is the protection of Medina cityscapes and

the historic city fabric considered an important element of heritage protection. However, in each country

planning legislation requires city master plans, structure plans, and/or detailed urban development plans,

and these usually make specific reference to historic city areas and may prescribe special development

controls.

The prime institutional actors for historic rehabilitation in each of the five countries are either national

agencies or city-level authorities. Those at the national level are ministries and their branches or specialized

agencies, and in every case these have nationwide development or heritage mandates. They may from time

to time take on specific tasks in Medina rehabilitation and cultural heritage protection, but their main remits

are much larger and more important. It should be underlined that none of the five countries have yet to

adopt anything approaching a national strategy/policy and/or national-level institution dedicated to the

rehabilitation of Medinas. However, elements of national policies towards Medinas can be found in most

countries, and in Morocco dialogue is underway to establish a firm national policy for Medinas rehabilitation.

Local authorities in all five countries suffer from poor own-source revenues and depend on central

government for most capital investments. In spite of years of support, they remain financially and

technically weak. And, as officials (except in Egypt), municipal leaders are frequently buffeted by local

politics. Furthermore, for property taxes, building permit regimes, registration charges, the sale of

development rights etc., the collection of revenues is usually very poor and sometimes open to corruption.

In all five countries there have been decades of wide ranging efforts to rehabilitate Medinas and historic city

centres. To generalize, there are five major categories of initiatives and interventions: (1) heritage protection

/ preservation / conservation, (2) public space improvements, infrastructure, public services, (3) private

building improvement, (4) social and economic development, including supporting private investment, and



(5) commerce and traditional crafts support. Although some initiatives may be bundled into large

investment projects with single implementers, practically all efforts are composed of a large number of

small, discrete interventions that span a number of development sectors and involve a number of partners.

As a result such issues as coordination, project management, and overhead administrative costs are a

constant challenge.

In all five countries standard funding means for Medina rehabilitation could be called “free-ride”

mechanisms. They have been and continue to be, from the point of view of the implementing agencies,

mainly grant funded through government budget allocations. It is important to underline that in Medinas

rehabilitation projects with even partial financial return or cost recovery have been very rare. Innovative and

non-traditional financing tools or PPPs for Medina rehabilitation are practically unknown in any country.

MSME and micro lending programmes are, by contrast, very common in all five countries, yet in most cases

these are country-wide in scope and are not specifically targeted to Medina residents, enterprises or

investors. Lending for house improvement in Medinas is very rare.

Value-added of Medinas Investment and Rationale of an Investment Programme The quantification of the socio-economic consequences of Medina rehabilitation using economic methods

such as economic impact studies or social-cost benefit analyses is difficult due inter alia to the difficulty of

monetising many impacts, and the lack of reliable data in the countries and Medinas. Programmatic level

analysis has limited meaning due to the diversity of the countries and Medinas. Assessment should take

place at project level. Guidance is provided on appropriate approaches for project level assessment under

the Investment Programme.

The Pre-operational Study contains a qualitative assessment of the socio-economic impact. Key elements in

the determination of the socio-economic impact are the authenticity value, the avoided costs and the non-

use value. Authenticity value includes tangible (historical design and architecture) and non-tangible

(emotional connection with history) elements. Authenticity value is realised especially through tourism, but

also through other functions (e.g. trade or residential appeal). Added value is also seen in the avoided cost of

new buildings and infrastructure, literally the value saved of not having to rebuild the area. Medinas also

provide non-use value, the value society attributes to having such heritage sites.

Based on the rough socio-economic assessment, it is likely that most project level socio-economic

assessments will prove to be positive for the cities and countries in which they are located. The business case

for Medinas rehabilitation is with some exceptions not well understood within the region and there are

characteristics which make value capture difficult. The economic returns of Medinas rehabilitation are most

likely larger than direct financial returns. Non-use values can be large, but are not easily translated into

financial revenues, except via general taxes, and Medinas rehabilitation has ‘free-rider’ problems. The

analysis also suggests that there is not a single ‘model’ business case for rehabilitation of Medinas, but that

customization of interventions is critical, with emphasis on a balanced and integrated approach. The general

conclusion is that Medinas add value to cities and countries, and that there is an underlying economic

rationale for an Investment Programme that supports their rehabilitation and preservation.

Outline of the Medinas 2030 Investment Programme During the Medinas 2030 Pre-operational Study, five countries and the 17 target Medinas and historic city

centres were visited. Through initial project identification, a preliminary project data base of interventions

and investments potentially relevant for the Medinas 2030 Investment Programme was developed. These 63

potential projects, which vary considerably in terms of scale, detail and emphasis, are described in details in

Volume II. With some exceptions, public agencies did not have clear programmes and projects already

formulated, and with some exceptions, the projects were weakly developed with little documentation. This

indicates that developing a portfolio of bankable Medina rehabilitation projects require significant pre-

investment in project formulation, and existing institutions in most countries do not have sophisticated



project development capabilities. In the minority who do, the dominant focus is on grant financing.

Innovative approaches and financial mechanisms are rare.

The Pre-Operational Study found that substantial further pre-investment in technical support is required in

the countries and their Medinas to (1) assist in articulation of rehabilitation projects, and (2) address the

more systemic dimensions of Medinas rehabilitation and management to ensure sustainability. It was

recognised that there is considerable diversity in the contexts, frameworks, institutional arrangements and

approaches to Medinas in the different countries, and that there is not a single model that can be adopted.

An effective Investment Programme must therefore be able to be used in these different contexts and to

provide varied support according to what is required.

In this context the strategic approach for the proposed Investment Programme focuses on:

First, through investment activities supporting the establishment of a sustainable, predominantly

public institutional frameworks for the management of and further investment in Medina

rehabilitation and preservation (achieve a desired framework).

Second, to be responsive to potential delays in the establishment of public institutional

frameworks, through investment to support a diverse range of potential local initiatives to

rehabilitate and preserve Medinas (act in a real framework).

To implement this strategy, the Investment Programme is structured on six guiding principles, namely:

1. Communication, Awareness-Raising and Knowledge Sharing – to continue to build awareness in

the neighbourhood region of the importance of Medina rehabilitation, and to share knowledge on

approaches

2. Flexibility and Tailored Solutions – provide different forms of support for countries and Medinas

according to what is required in each context

3. Promoting Bottom-Up Solutions and Rewarding Responsiveness – encourage and support

countries and Medinas to actively take part in the Investment Programme

4. Blending of Finances – combining technical and grants support to leverage other financing sources,

drawing especially on European blending experience

5. Bundling of Projects – packaging multiple smaller projects to create financial scale, consisting of

the following sub-principles:

Bundling multiple small projects into packages covered by framework or global loan operations

Bundling Medina rehabilitation projects into wider sectoral or citywide programmes

Creating integration by bundling different project types (e.g. infrastructure, social, commercial) into packages

6. Leverage of Impact and Demonstration Effects – combining efforts of multiple sponsors and

creating project-level demonstration effects

The scope and coverage of the Medinas 2030 Investment Programme should flexibly be open to (1) classic

Medinas, (2) historic city centres and (3) the core of small archaeological towns. Principal focus should

however be on the classic Medinas where most potential value exists. The Investment Programme should

include the five current countries (Morocco, Tunisia, Egypt, Jordan and Lebanon), however priority focus

should be placed initially on Morocco, Tunisia and Egypt. Other countries such as Algeria, Libya, Palestine



and Syria should be included based on responsiveness. The ‘Medinas’ brand should be maintained to build

on the momentum created.

An initial ranking of rehabilitation potential was conducted of the Medinas included in the study (higher

numbers on the ranking indicate higher potential). This provides guidance for the initial focusing of activities

of the Investment Programme, however the Investment Programme should mainly be guided by the

responsiveness of participating countries and Medinas.

MEDINA

1 2 3 4 5 6 7

Total Monumental

heritage value

Urban

heritage value

Existing

strategy &

plans

Public

property

opportunities

Potential for

revenue

generation

Tourism

Potential

Public partner

support

Essouaira (M)

4 3 3 4 4 4 3 25

Meknes (M)

4 4 3 2 3 3 3 22

Tunis (T)

4 4 2 3 3 4 2 22

Tetouan (M)

4 4 3 4 3 3 3 24

Casablanca

(M)

1 3 2 3 3 2 2 16

Historic Cairo

(E)

4 3 1 1 2 3 2 16

Kairouan (T)

4 4 2 2 2 2 2 18

Salé (M)

3 4 1 4 3 2 2 19

Sousse (T)

4 4 1 2 3 3 2 19

Sfax (T)

2 2 1 2 1 1 1 10

Sidon (L)

2 2 1 2 2 1 2 12

Tyre (L)

2 2 1 2 2 1 2 12

Tripoli (+Al

Mina) (L)

3 2 1 2 2 1 2 13

Karak (J)

2 1 1 1 1 1 2 9

Baalbek (L)

1 1 0 1 1 1 1 6

Jerash (J)

1 0 0 1 0 1 1 4

Based on the strategic approach and guiding principles for the investment programme, four main

components are proposed for the Medinas 2030 Investment Programme. These components allow for

flexible and tailored interventions to be formulated in different countries and Medinas based on specific

local conditions, responsiveness and requirements:

1. Immediate Medina Project Investments Using Existing Operations (Relatively Quick Wins)



2. Creation of Basic Systems for Sustained Management and Financing of Medinas (Short Term

Sowing)

3. Rehabilitation Programmes Requiring Strong Institutional Frameworks (Longer Term Wins)

4. Alternative “Bottom up” Financing Mechanisms and Structures for Medina Rehabilitation

(Redundancy)

The strategic logic of the four Investment Programme components is to maximize the chance of a positive

and sustainable impact of the Investment Programme in the Medinas. Component 1 allows for investments

to be made in the few public or private rehabilitation projects than can be made ready with relatively limited

technical support (project formulation). Component 2 focuses on providing support to establish effective

(public) institutional arrangements for the Medinas, such as developing national policies or preparing

integrated Medina development plans. Component 3 concerns larger-scale, integrated (national) Medina

rehabilitation programmes that are possible where the (public) institutional framework is already sufficiently

in place, or has been sufficiently developed via Component 2. Finally, Component 4 provides a number of

alternative and ‘bottom-up’ financing mechanisms and structures that can be implemented in Medinas

irrespective of the (public) institutional framework, focusing more on the involvement of the private sector

and civil society.

Component 1. Near-term Medina Project Investments Using Existing Operations (Relatively Quick Wins) –

this involves supporting further project formulation and investment in rehabilitation

projects that are already in a relatively mature stage using principally existing financing

products. This includes a small number of discrete commercial project investments, and

some bundled packages of infrastructure and public domain projects. Note that these

projects are considered “Relatively Quick Wins” as although they are more developed, some

further support in project formulation will still be required.

Component 2. Creation of Basic Systems for Sustained Management and Financing of Medinas (Short

Term Sowing) – this involves provision of principally technical support for the improvement

of the framework, institutional and financial arrangements for the sustained management

and financing of Medinas. This includes:

National level initiatives and interventions (e.g. policy and legal framework

development, etc.)

Local level initiatives and interventions (e.g. preparation of integrated rehabilitation

plans, establishment of Medina management arrangements, etc.)

Component 3. Rehabilitation Programmes Requiring Strong Institutional Frameworks (Longer Term Wins)

– this involves two forms of interventions that require a relatively strong (public) institutional framework to be in place, or to be developed, namely:

Replication of Integrated National Medina Support Programmes – this involves

introducing national-level integrated support programmes including national

components and implementation in multiple participating Medinas. These should

replicate and improve on similar national programmes which have been implemented

in the region.

Public Private Partnerships – this involves establishing (contractual) arrangements

between public bodies and the private sector for the rehabilitation of Medinas, or for

parts of their rehabilitation. Although difficult to realize as they require a strong

(public) institutional framework, opportunities (like the Kasbah of Tetouan) show that

PPP models can have an important role, also as part of national-level support

programs.



Component 4. Alternative “Bottom up” Financing Mechanisms and Structures for Medina Rehabilitation (Redundancy) – this involves introducing more innovative and alternative financing mechanisms and structures for Medinas rehabilitation. These require further ‘in situ’ development however they maximize the role of the private sector and civil society, allowing for Medina rehabilitation to be supported in most situations, as well as where (public) institutional frameworks cannot be established. The main recommended mechanisms and structures are:

Commodity-based rehabilitation financing – applying to rehabilitation a new financing

technique being used in the renewable energy sector where financing for

rehabilitation is channelled via materials suppliers and contractors

Asset management model for religious endowments – models in which the private

sector is engaged in the maintenance and use of historic assets held by religious

endowments

Improvement districts – a financing and management model for (historic) area-based

rehabilitation and improvement organised by local stakeholders that is seeing

expanding use in both developed and developing country contexts

Additional ‘Medina windows’ within MSME credit lines and framework loans –

channelling financing primarily for MSMEs in Medinas via larger-scale lending

operations with domestic partner banks of institutional partners

Housing finance and financing of property rehabilitation – providing more traditional

(mortgage-backed) housing loans as well as end-user financing for property

improvements in Medinas, mostly linked to wider loan programmes to create scale

Possible Medinas 2030 Facility A key issue for the success of the Medinas 2030 Investment Programme will be the institutional

arrangements put in place for its implementation. The study findings systemically indicate the need for

further technical assistance in the region for an adequate pipeline of rehabilitation projects to be formulated

and ideally formulated within an appropriate institutional framework. Several European facilities (e.g.

FEMIP, NIF, etc.) and potential sponsors (e.g. EIB, CDC, AFD, WB, etc.) potentially relevant for Medinas

rehabilitation exist. However there is a strategic consideration whether existing facilities or sponsors acting

alone will be able to provide sufficient specialized focus and attention for successful implementation of a

Medinas 2030 Investment Programme.

The complexity of Medinas and their country contexts is high, as is the need for carefully tailored solutions,

while the focused capacity of many sponsors is limited. The study suggests that considering relevant factors

– such as continuing the Medinas 2030 momentum, ensuring that sufficient focus on Medinas is maintained,

the specialized nature of heritage rehabilitation, and the need for impact – there is a rationale for

establishing a dedicated Medinas 2030 Facility.

A dedicated Medinas 2030 Facility would provide an institutional and financial capacity for sustained

awareness-raising and knowledge sharing regarding Medinas rehabilitation and preservation in general, and

specific support to countries, cities and Medinas for:

1 preparation of their activities and initiatives for Medina rehabilitation and preservation

2 further identification and formulation of investment projects for Medina rehabilitation

3 improving systemic problems facing Medinas and establishing effective and sustainable Medina

management approaches and institutional arrangements

The co-sponsored Medinas 2030 Facility would potentially involve direct or indirect participation of

neighbourhood partner countries, European sponsors and promoters, agencies and financiers acting in a

coordinated fashion to maximize impact. Using a demand-led approach to encourage and reward

responsiveness from partner countries and Medinas, the Facility would provide:



1. Technical assistance (e.g. capacity building, project formulation, systemic changes, etc.) directly

and via TA grants

2. Project preparation support and access to financing by undertaking project formulation and

providing assistance in access to blended financing (e.g. grants, debt, equity, guarantees) from

existing institutions (e.g. EIB, CDC, AFD, WB) and facilities (e.g. NIF, FEMIP) (e.g. access to debt,

equity, guarantees, etc.)

A core recommendation of the Pre-Operational Study is therefore to establish such a regional-level Medinas

2030 Facility to effectively implement the proposed Investment Programme. It is proposed to initiate this as

soon as possible in the form of a small cell located in Europe or the region, potentially initially with FEMIP

and/or NIF funding, and thereafter to further operationally elaborate and establish the Facility proper.

The rationale for a regional-level Medinas Fund with commercial or (partly) revolving character to be

established is not found sufficient at this stage of the development of the market. However, it is likely that

as the volume of individual rehabilitation projects and larger national scale investment programmes

develops as a result of the work of the Medinas 2030 Facility, the potential for a regional-level Medinas Fund

will increase. Note that the possibility of setting up national level funds of a public and non-commercial

nature as part of large-scale, national Medinas rehabilitation programmes (e.g. Morocco) is recognised and

would be included in the project formulation support provided by the Medinas 2030 Facility.

Roadmap for Taking Forward the Medinas 2030 Investment Programme

A flexible Roadmap has been developed for the Medinas 2030 Investment Programme overall, and

guidelines for each country in particular. The main features of the proposed Roadmap are:

1. Expand the programme incrementally by Medina types, concentrating first on the ten classic

Medinas found in Morocco, Tunisia, and Egypt, then on other Medinas within these countries

(especially in Morocco)

2. Expand the programme incrementally by country, giving first priority to Morocco, then Tunisia,

then Egypt, and lastly Lebanon and Jordan. Other countries with important classic Medinas, such

as Libya, Algeria, and Palestine, should be subject to small exploratory efforts to assess

responsiveness for inclusion

3. Design considerable flexibility and periodic assessment into the Medina Programme, since

investment projects should be demand driven

4. Identify “decision points” in which the critical paths of programme expansion, in terms of projects,

Medinas, and countries, are assessed

Phase One 2013-2014 (2 Years) Exploratory Phase

1. Establishment of a small, dedicated unit within the EIB (or elsewhere) for the Medinas Programme

that will operate throughout the Exploratory Phase. Tasks will include:

a. Monitor and liaise with concurrent activities in Morocco (see below)

b. Deepen Tunisia contacts and projects, including (1) a project of property loans to Medinas

on the model found in the Oukalas project, (2) identify possible quick wins for private

investment through existing framework loans, (3) engage with ASMs and municipalities in

Sfax, Sousse and Kairouan on comprehensive rehabilitation plans, and (4) assist ASM-

Tunis to locate project grants funding

c. Regular field trips to Egypt, Lebanon, and possibly Jordan

d. Reach out to other international and European donors

e. Field visits to Libya, Algeria, and Palestine

f. During the Exploratory Phase, in all countries the dedicated unit will seek out potential

private investors and identify additional discrete investment projects (quick wins), and

additional ‘Medina windows’ within MSME credit lines and framework loans



2. Establish a consulting presence in Morocco with activities including:

a. Pre-feasibility / investment plans for integrated IFI-financed projects

b. Assist the Moroccan housing ministry (MHUPV) with its efforts to create a national level

institution and funding facility for the rehabilitation of Medinas

c. Identify private investment opportunities in the medinas of Essaouira, Meknès, Tétaoun,

Salé, and especially Casablanca and network on further project identification

d. Implement small local TAs for (1) the Comités de Pilotage of Casablanca and Salé to

elaborate their unified rehabilitation plans (2) explore with lawyers the powers of

expropriation for adaptive reuse in Medinas (3) investigate with the Service de Cadastre

the application of systematic property registration (‘immatriculation d’ensemble’) for all

or parts of selected Medinas (4) create with the Ministry of Culture an extended, tiered,

system of site registration and a legal framework for adaptive re-use of historic structures

for commercial purposes.

Phase Two 2015-2019 (5 Years) Expansion Phase

1. If appropriate, convert / upgrade EIB cell to dedicated Medinas 2030 Facility

2. Potentially establish consulting presence in Tunisia based on Morocco experience

3. Take-stock of Investment Programme achievements in Phase 1, and in particular an assessment on

the degree to which governments (and private sector) of each country are beginning to buy into

the Programme

4. Further possible Phase 2 activities:

a. Operationalize the first SME loans in Morocco and Tunisia (and in other countries if they

come up with discrete bankable projects) for private quick wins, principally using existing

framework/global loans to private investors

b. Based on investigations during the Exploratory Phase, prepare the launching of a project

of property loans to Medinas on the model found in the Oukalas project

c. Prepare and launch large-scale “slow wins” projects in probably Essaouira and Meknès

and perhaps another Medina or two in Morocco, hopefully with the new national fund as

maitre d’ouvrage

d. Prepare pre-feasibility studies for more investment projects (both integrated sovereign

loan slow wins and discrete investments – such as hotels in converted historic buildings) in

other Moroccan and Tunisian Medinas.

e. At the start of Phase Two, develop a tentative five year plan for the Programme in Jordan,

Lebanon, and Egypt, and, as required launch exploratory consultant team(s).

f. Launch a project identification study in Libya and Algeria and Palestine.

Phase Three 2020-2030 (11 Years) Consolidation Phase

By 2020 the Investment Programme would be fully running. It will probably continue to be managed by the

Facility set up at the beginning of Phase Two rather than separate fund, unless the volume of investments

greatly expands in Phase Two to justify such a fund.

In Phase Three there would be consulting teams operating in various countries, missions from the Facility to

the partner countries would be common, and there will be an increasing list of candidate projects of all

varieties. Also, large integrated Medina rehabilitation projects are expected to be running by the beginning

of Phase Three in Morocco and, perhaps, other countries. In addition, more innovative financing

mechanisms are expected to have been launched, at least on a pilot basis. In effect, the investment portfolio

of the Facility is expected to become substantial and to increase in size at least through the first half of

Phase Three. Given this increasing activity load, there will be a need for effective means to monitor projects



and initiatives and to provide feedback for new Programme initiatives. To be explored would be the idea of

setting up technical offices for the Programme in important countries to handle the larger sets of activities.

Strategies and Guidelines for Rehabilitation Investment Operations in Each Country As part of the Roadmap for the Medinas 2030 Programme, the Consultants have developed basic strategies

to be adopted in each country that follow directly from the overall strategic approaches. The aim is to give

guidelines that are well grounded in the specifics of each of the five countries, reflecting the Consultants’

conviction that, while a regional approach for a Medinas facility/fund is correct, it is at the country and

Medinas levels that efforts must be concentrated, that key stakeholders are engaged, and that progress will

be achieved.

For each country, an overall strategy is elaborated, possible quick-wins and their promoters are identified as

are longer term slow wins, including broad-based integrated programmes. Also addressed are structural

strengthening issues, mainly institutional in nature, as well as alternative financing issues. Finally, a

thumbnail roadmap for applying the Medinas 2030 Programme in each country is constructed.



2 Introduction and Background to the Pre-Operational Study

2.1 Pre-Operational Study Objective and Terms of Reference

The ”Medinas 2030” initiative was conceived at the Venice Bienale Conference in 2008 and sets out to

address the issue of the rehabilitation of Medinas in all Mediterranean Partner Countries. In particular, the

initiative aims at investing in the rehabilitation of Medinas in a way that ensures their sustainable

regeneration and preservation by 2030, through an integrated strategy by a number of actors led by the

European Investment Bank (EIB) and including the Agence Française de Développement (AFD), the Caisse

des Dépôts et Consignations (CDC), and the World Bank, under the umbrella of the Marseille Centre for

Mediterranean Integration (MCMI) and in collaboration with national policy makers and local authorities.

The Pre-Operational Study is a key component of the Medinas 2030 initiative and a necessary step before

the launching of any investment programme. The Pre-Operational Study needs to justify the rationale of a

future investment programme by investigating opportunities for intervention by the EIB and other partners

in the Medinas of the target five countries and to ascertain the value added of such a programme. The

Consultants of the Pre-operational Study have been guided by a Terms of Reference prepared by the EIB.

This ToR specifies the following objectives:

1. To identify the scope of a potential Medinas 2030 Investment Programme and estimate the value-

added of such a programme;

2. To investigate and adapt innovative mechanisms of financing to support rehabilitation operations

that could complement more traditional means such as loans and grants;

3. To produce strategies and guidelines for different types of rehabilitation operations and identify a

portfolio of potential operations; and

4. To design a Roadmap, including a proposed timeline, and key indicators that can later be used to

effectively monitor the progress of the Medinas 2030 Investment Programme.

2.2 Study Scope, Team and Timeline

The scope of the Pre-Operational Study was reduced from the original six countries due to events in Syria,

and thus focuses on five countries and 17 Medinas and historic city centres, as follows:

Table 1 Countries and Medinas Included in the Pre-Operational Study

Country Historic City / Medina

Morocco Casablanca, Sale, Meknes, Tetouan, Essaouira

Tunisia Kairouan, Sfax, Sousse, Tunis

Egypt Cairo

Jordan Karak, Jerash

Lebanon Tripoli, Al Mina (within Tripoli), Baalbek, Tyre (Sur), Sidon

A Scientific Committee was established to provide guidance and act as a communications intermediary

between the Study consultants, the financial partners, and the Mediterranean partner countries. It is made

up of representatives of the EIB, the AFD, the CDC and the World Bank, as well as urban development

experts and representatives of the national ministries and local authorities of the five partner countries. At

the European Investment Bank, the Projects Directorate (PJ) and the Directorate for Lending Operations

outside the European Union (OpsB) are responsible for the management and technical follow up of the

study.



The Consultant team was composed as follows:

Mr. David Sims, Urban Planner / Economist and Team Leader

Mr. Wout Korving, Team Financial Specialist

Dr. Nicholas Warner, Team Architectural Historian

Mr. Serge Yazigi, Team Housing Specialist

Mr. Rolf Dauskardt, TA Operations Director

In addition to the core team, a range of specialists provided short term inputs. Throughout the Pre-

Operational Study the team was centred within the region, with Mr. Sims and Dr. Warner in Cairo and Mr.

Yazigi in Beirut. Mr. Korving, as financial specialist, was based in Rotterdam, as was Mr Dauskardt.

The study adhered to the workplan for the study period (March 2012 through February 2013) first approved

in the study Inception Report, and with the timing of field trips adjusted around the Ramadan period. This

adjusted plan submitted in Progress Report One and the dates for submission of deliverables was adhered to

for the remainder of the Study. This revised workplan is presented in Figure 2.

The main activities and events of the Pre-operational Study were as follows:

A kick-off meeting took place at the EIB offices in Paris on 2 March 2012, attended by the Consultants and representatives of both the EIB and CDC.

A meeting of the Scientific Committee of the Medinas 2030 Programme took place at the CMI in Marseilles on 23 April 2012 in which the Consultants presented their inception report and workplan.

A workshop entitled “Sustainable Development in the Medina” attended by over 50 participants entitled on 24 and 25 April 2012 in Marseilles in which the Consultants served as moderators and animators.

The situation in Historic Cairo and analysis of its investment potential were investigated by the Consultants during the month of May 2012. Also, initial investigations were carried out in Lebanon.

First consultations with EIB in Luxembourg regarding financing mechanisms were carried out during May 2012.

A field trip to Morocco and its target Medinas was carried out by the Consultants over 3 – 15 June 2012.

A field trip to Tunisia and its target Medinas was carried out by the Consultants over 3 – 17 July 2012.

A field trip to Jordan and its target Medinas was carried out by the by the Consultants over 3 – 10 September 2012.

Second consultations with EIB in Luxembourg were carried out during September 2012.

A field trip to Lebanon was carried out by the Consultants over 12 – 16 September.

Further fieldwork follow-up in Cairo was carried out in September 2012.



A brainstorming session on the Medina 2030 Programme was carried out in the offices of the EIB in Luxembourg on 16 October 2012. A number of partner institutions in the programme were represented and the Consultants presented a number of points for discussion.

A second meeting of the Scientific Committee took place at the CMI in Marseilles on 13 November 2012 in which the Consultants presented their preliminary findings and concept recommendations.

A workshop entitled “Sustainable Project Implementation in the Medina”, attended by more than 60 participants, was held on 13 and 14 November 2012 in which the Consultants served as moderators and animators. The workshop was an important event at which the preliminary findings and concept recommendations of the Consultants were discussed.

Several consultation meetings on findings with the EIB and CDC in Paris, Brussels and Luxembourg.

As specified in the Terms of Reference, a number of reports were prepared and submitted in both English

and French. The following reports have been completed and submitted:

Inception Report – 16 April 2012.

Progress Report 1 – 16 June 2012

Progress Report 2 – 18 August 2012

Progress Report 3 – 13 October 2012

Draft Final report 8 December 2012

This Final Report is being submitted on 28 January 2013. A presentation of the Final Report will be scheduled

by the EIB for end January or early February.

2.3 Study Methodology and Activities

During the Study the Consultants have taken a practical approach that puts primary emphasis on the

Medinas themselves and their country context, based on the conviction that this “bottom-up” orientation

will produce the best understanding of trends and needs and thus possible investments that will be effective

and add the most value.

On the other hand, considerable efforts have also been devoted to investigating both possible financial

mechanisms and potential sources of funds for Medina rehabilitation. This could be called a “top-down”

approach that recognizes that the macro funding and institutional context (at the national and especially

international levels) must also be understood in order to design a program that can tap a wide range of

funding sources.

The starting point for the ultimate design of a Medinas 2030 programme is found at the meeting point of the

bottom-up with the top-down approaches. It is here that a synthesis, both overall and for each country, can

be developed. This meeting of vectors can be illustrated graphically, as is done in Figure 1.



Figure 1 Pre-Operational Study Methodology

Another methodological approach adopted by the Consultants relates to the time scale and horizon. We

have taken as given that an effective multi-country Medinas 2030 Programme cannot be built within a short

period. There are a number of external factors as well as internal constraints that dictate a step by step and

flexible approach over at least the next four to five years. Only by building informed flexibility into the

process – in terms of geographic scope, partner combinations, investment package mixes, and resource

availability – can a successful and effective programme be developed that will lead to achieving the

objectives of a Medinas rehabilitation programme by the year 2030.

2.4 Purpose and Contents of this Report

This Final Report presents the main analyses, findings and recommendations of the Consultants regarding a

possible Medinas 2030 Investment Programme. Given the comprehensiveness of the study, the reports have

been organised into two Volumes.

Volume One (this report) provides the analysis, the design of the proposed Medinas 2030 Investment

Programme and related implementation mechanisms, and an implementation Roadmap. It contains a

summary of the country-by-country findings as well as a presentation of the main rationale, strategy, and

recommendations for going forward towards a Medinas 2030 Programme.

Volume Two contains separate country reports for each of the five countries and their Medinas. Each

country report presents the basic analyses of the country context, as well as detailed analysis of each Medina

included in the study. This focuses on the specific challenges and obstacles in each country and Medina, and

leads onto the subsequent development of the Medinas 2030 Investment Programme to take this diversity

effectively into account. Also included is information on the specific projects identified in each country and

Medina during the study. Each country report contains the following:



National and urban context

Historic city centres: definition, scope and cultural/heritage value

Legal framework for historic preservation

Trend analysis and needs assessment

Past and present rehabilitation projects and initiatives

Current institutional responsibilities and potential project promoters

Financing rehabilitation: sources, returns, and strategies

Current national policy formulation for Medinas

Possible project pipeline

Possible project data base

Persons met and selected bibliography

The contents of this report – Volume I Medinas 2030 Investment Programme – comprises the following

Sections:

Section 1: Introduction and Background to the Pre-Operational Study

Section 2: Analysis of the Medinas, which includes a description of the five countries, 16 cities and 17 Medinas covered in the study; an overview of the conditions and development trends in the Medinas; the current frameworks, initiatives and approaches for Medinas conservation and rehabilitation; and country trends relevant for the Medinas 2030 Investment Programme.

Section 3: Value Added and Rationale of a Medinas Investment Programme, which includes the investment rationale based around the question “Do Medinas add value to cities and countries?”; specific issues regarding the business case for Medinas and the capturing of value of Medinas; and the potential value-added of a Medinas 2030 Investment Programme.

Section 4: Proposed Investment Programme for the Medina 2030 Initiative, which includes the proposed strategic approach and guiding principles, proposed investment instruments; and a proposed Medinas 2030 Facility.

Section 5: Proposed Roadmap for the Medinas 2030 Investment Programme, which includes an overall roadmap for taking forward the Medinas 2030 Investment Programme, and strategies and guidelines for rehabilitation investment operations in each of the five countries included in the study.

Sections 6: Documents and reports consulted by the study.

Annex 1: Case Studies informing the design of the Investment Programme

Annex 2: Projects Identified during the Pre-Operational Study for possible inclusion in the Investment Programme



Figure 2 Pre-Operational Study Workplan



3 Analysis of the Medinas

In this Section, the analyses of the situation, trends, opportunities and constraints in the five countries and

their historic city centres are summarized. Conclusions derived from these analyses are highlighted which

underpin the recommendations for a Medinas 2030 Programme, presented in subsequent Parts 3 through 7.

For readers seeking more detail of the situation in specific Medinas and specific countries, please refer to the

five country reports contained in Volume Two.

As will become apparent in this Section, the subject of Medinas and historic urban centres is a complicated

one, despite the fact that they present similar problems and opportunities based on their common shared

cultural value. Each Medina is unique and the contexts in which they are found differ from country to country

and even region to region. Thus in summarizing the analyses of the Medinas, it is inevitable that for the sake

of clarity some generalizations are made. Thus it is important to refer to the country reports in Volume Two

for a more precise understanding of Medinas.

3.1 The Five Countries and their Medinas of the Pre-Operational Study

The Pre-Operational Study covered five countries – Morocco, Tunisia, Egypt, Jordan and Lebanon – across

the Mediterranean neighbourhood region.

Figure 3 Mediterranean Neighbourhood Region with the Selected Countries and Medinas

3.1.1 Definitions of Medinas and the Historic City Centres Studied

The Consultants were charged with studying the feasibility of a Medinas 2030 Investment Programme in 16

cities and 17 Medinas over five countries. All the countries are Arab and predominantly Muslim and thus

have a unifying cultural background: in all of them the Medina or historic centre provides a keystone of

national identity. Despite this commonality, historical and regional differences together with the impact of

twentieth century developments have ensured that today there is no unique urban phenomenon that can be

called the ‘Medina’ across the entire region. In fact, it is possible to distinguish between at least three urban

typologies, as shown in Table 2. These three types are termed here the “classic Medina,” the “historic inner-

city centre” and the “core of a small archaeological town.”



Table 2 Typologies of Medinas

Type Description Examples

Classic Medina Well defined medieval urban fabric, either

walled or with vestiges of city walls, with

extensive traditional markets (souqs) and

high value historic buildings, little if any

vehicular penetration, and associated

historic cemeteries.

All five Moroccan Medinas

(Casablanca, Tetouan, Salé,

Meknes, and Essaouira), all four

Tunisian Medinas (Tunis, Sousse,

Sfax, and Kairouan), and Historic

Cairo

Historic inner-city

centre

Traditional central city areas with vestiges of

medieval urban fabric, some traditional

markets (souqs), and some buildings of

historic merit.

In Lebanon, Tripoli, Al-Mina,

Sidon, and Tyre.

Core of small

archaeological town

The cores of small provincial towns, mainly

dating from the 19th century with little

traditional urban morphology, in immediate

proximity to major pre-Islamic

archaeological sites,.

In Lebanon, Baalbek

In Jordan Karak and Jerash

These categories can of course be questioned, and there certainly are nuanced differences between them.

For example, some might question whether Historic Cairo is a ‘classic Medina,’ since the distinction between

the core of the Cairo Medina and its surrounding urban areas is blurred, and there are significant historic

clusters lying well outside the normally accepted boundaries of Historic Cairo.1 Also, some might say that

the historic core of Tripoli in Lebanon should be called a ‘classic Medina’, and the Medina of Tyre could be

called, in addition to a ‘historic inner city centre’, a ‘core of a small archaeological town’ due to the nearby

Greco-Roman ruins. The categorization does, however, point to major physical and typological differences

between the cities selected for inclusion in the Programme.

Also, it must be recognised that within each category are to be found considerable variations, especially as

regards ‘classic Medinas.’ These vary greatly in size and character within individual countries. Thus, for

example, the Medinas of Morocco vary from populations of 5,000 to 200,000.2 Some are embedded within a

much larger agglomeration, such as Casablanca, and are almost insignificant in population and economic

terms. Conversely, some Medinas in Morocco represent 10 to 20 percent of the overall city population (e.g.

Fez, Essaouira and Meknès). In Tunisia, the Medina of Tunis including its faubourgs with a population of

100,000 is almost ten times larger in population and area terms than those of Sfax, Sousse, and Kairouan.

Even so, the Medina of Tunis has a population that only represents 4.5 percent of the larger urban

agglomeration. The small demographic footprint of classic Medinas reaches an extreme in Egypt, where

Historic Cairo’s total population of 370,000 (historic core plus older fringe areas) represents less than 2

percent of that of Greater Cairo. The trend of shrinking populations relative to larger agglomerations in

most classic Medinas is becoming more pronounced. Medina populations continue to decline, or at best

stabilize, whereas the urban agglomerations in which they are located continue to expand inexorably.

3.1.2 Other Medinas within the Region

The 17 Medinas and historic town centres selected for study cannot be seen in isolation. The region is very

rich in similar urban areas, both within the five countries studied and in neighbouring countries. The

following points should be kept in mind, since there is a compelling logic in eventually including at least

some of these urban areas within a Medinas 2030 Programme:

1 For a detailed cartographic discussion of what constitutes the areas that make up Historic Cairo, see UNESCO World Heritage

Centre, November 2012. ‘Urban Regeneration Project for Historic Cairo. First Report of Activities July 2010-June 2012.’ 2 Marrakesh is reported to have the highest Medina population in Morocco at 200,000 inhabitants.



Besides the five Medinas studied in Morocco, there are 26 other Medinas found in both large and small towns throughout the country (mainly in the northern half). And this does not include ksours and isolated kasbahs.

In Algeria there are a number of ancient city centres that could be considered classic Medinas, especially the famous Medina or kasbah of the capital Alger. There is also an old quarter in Oran and another two in Tlemcen and in Mostaganem (Tijditt).

Besides the four Medinas studied in Tunisia, there are a number of smaller Medinas and kasbahs in smaller towns, especially those located in the interior.

In Libya there are at least seven historic city centres that could be considered at least partially ‘classic Medinas,’ including the very distinct Medina of Tripoli and Medinas or historic city centres in Benghazi, Derna, Gharya, Murzuk, Hun, Waddan, and Tazirbu.

In Egypt there are no other important historic city centres to match the heritage value of Historic Cairo, although the towns of Rashid and Fuwwa in the Delta have significant Ottoman period cores. Alexandria also has a small ‘Turkish Quarter’ that contains some historic elements.

In the Palestinian territories the ancient city centre of Khalil (Hebron) stands out, and there are also old cities in Gaza (Daraj and Zeitoun quarters) and in Nablus (six quarters). This is without mentioning the old city of Jerusalem itself (al-Quds), whose primacy as a classic Medina and world heritage site is without question.

In Jordan there are few historic urban centres, although the provincial town of Salt has a very significant assemblage of 19th century buildings of architectural value.

In Lebanon, besides the city centres included in this study, there are only a few other small town centres of historic value, such as Jbeil (Byblos), Zahle, Jezzine, and Beit al-Din.

In Syria the old city centres of Damascus, Aleppo, and Hama are of course very important Medinas from historical, cultural and architectural perspectives. These three towns were originally included in the list of target Medinas for the Medinas 2030 Pre-operational Study, but were dropped due to the unfolding conflict in the country.

It should be added that adjacent to most Medinas in Morocco, Tunisia, and Egypt are to be found ‘nouvelles

villes’ or foreign districts. These were constructed from the end of the 19th century and contain a wealth

high-value architectural heritage from neo-classical colonial and neo-Islamic hybrid to arte nouveau and arte

deco styles, Much of this architecture is now over a century old. At the same time these areas today

represent vibrant downtown business and leisure districts that draw tourists and definitely add value to the

cities they are in. They also provide an interesting counterpoint to the adjacent Medinas from an urban point

of view. Prime examples include the downtown ‘nouvelle villes’ of Rabat (recently included within the 2012

World Heritage Site Registration), Casablanca, Tétouan, Tunis, and Cairo. The ‘nouvelles villes’ of Tunis and

Tétouan (Ensanche) have already been the subject of architectural preservation and revitalization studies.

3.1.3 National and Urban Contexts in Morocco, Tunisia, Egypt, Lebanon and Jordan

The main parameters of the five countries are summarized in Table 3. In demographic terms Egypt is by far

the largest country, followed by Morocco, Tunisia, Jordan and finally Lebanon. Annual population growth

rates are highest in Jordan and Egypt (2.2 and 2.0 percent) and the others at between 1 to 1.3 percent. All

five countries have majority urban populations, with those of Egypt, Lebanon, and Jordan at over 70



percent. In Lebanon, Jordan, and Tunisia, the capital cities account for a very large percentage of the

national populations. On the other hand, in Morocco several cities have significant populations, with

Casablanca in the lead with 3.25 million.

In GDP per capita terms (purchasing power parity) Lebanon is by far the highest at US$ 15,600, followed by

Tunisia at US$ 9,500, Egypt at US$6,600, Jordan at US$5,900. The lowest is Morocco at US$ 4,800. It is

interesting to compare annual GDP growth rates for 2010 (the year before the Arab Spring) with the rate in

2011. In all countries, except for Morocco, annual GDP growth dropped dramatically, approaching zero in

some cases. In all cases tourism is an important but not overwhelming contributor to national income.

Table 3 Country Parameters (all monetary figures in current USD)

Item Morocco Tunisia Egypt Lebanon Jordan

Country population 2010-

2011

31.9 million 10.9 million 82.5 million 4.4 million 6.5 million

Estimated Annual population

growth (2010)

1.05% 1.2% 2.0% 1.3% 2.2%

Estimated % of population

urban (2010/2011)

58% 65% 70% (43%)* 87% 79%

Estimated GDP in PPP terms

(2010)

$171 billion $104 billion $519 billion $61 billion $38.4 billion

Estimated GDP growth in

PPP terms 2010

4.9% 3.1% 5.1% 7.5% 5.5%

Estimated GDP growth in

PPP terms 2011

4.3% 0.0% 1.8% 1.5% 2.5%

Estimated GDP per capita in

PPP terms 2010

$ 4,800 $9,500 $6,600 $15,600 $5,900

Estimated population of

largest urban agglomeration

(2008-2010)

3.25 million

(Casa-

blanca)

2.25 million

(Greater

Tunis)

18 million

(Greater

Cairo)

2.0 million

(Beirut)

2.5 million

(Greater

Amman)

Estimated tourism

contribution to GDP 2010

17 to 20% 6 to 8% 6 to 10% n.a. 14%

* official 2006

Sources: wed sites of CIA World Factbook, Indexmundi, or Global Finance

These figures demonstrate that the national contexts of the five countries vary considerably, with a

considerable spread in GDP per capita. However, in all cases tourism is a significant contributor to the

economy, urban life is very dominant, and the Arab Spring is having a profoundly negative, if short-term,

macroeconomic impact (except in Morocco).

3.2 Overview of Current Conditions and Development Trends in the Medinas

The basic composition of the Medinas included in the Pre-Operational Study and their context within the

wider cities is provided in Table 4 below.

Table 4 Basic Makeup of the Medinas Included in the Pre-Operational Study

Medina Type of Medina Surface area (hectares)*

Current population

estimate

Population as % of metro

population

World Heritage

Site Status

Prior major donor-

assisted projects

Essouaira (M) Small classic Medina 30 16,700 24% Listed None

Meknes (M)

Large classic Medina 150 39,500 10% Listed None



Medina Type of Medina Surface area (hectares)*

Current population

estimate

Population as % of metro

population

World Heritage

Site Status

Prior major donor-

assisted projects

Tunis (T)

Large classic Medina 266 100,000 4% Listed WB Culture Project and WB Urban 3

Tetouan (M) Large classic Medina 50 24,000 9% Listed None

Casablanca (M)

Large classic Medina 47 39,000 < 2% None None

Historic Cairo (E)

Large classic Medina 490 325,000 1.8% Listed Aga Khan

Kairouan (T) Large classic Medina 78 23,000 15% Listed WB Culture Project and AFD

Salé (M)

Large classic Medina 90 29,000 3.6% Proposed None

Sousse (T)

Small classic Medina 39 < 5,000 2.5% Listed WB Culture Project and AFD

Sfax (T)

Small classic Medina 24 4,200 < 1% Proposed WB Culture Project and AFD

Sidon (L)

Historic town centre 28 < 10,000 < 5% None WB/AFD CHUD project

Tyre (L)

Historic town centre 18 < 5,000 < 5% Listed (arch. site)

WB/AFD CHUD project

Tripoli (+Al Mina) (L)

Historic town centres 97 + 38 28,000 + 10,000

6.3% None WB/AFD CHUD project

Karak (J)

Archaeological Town 48 < 4,000 < 20% None WB Tourism and Urban Project

Baalbek (L)

Archaeological Town 17 < 3,500 < 3.5% Listed (arch. site)

WB/AFD CHUD project

Jerash (J)

Archaeological Town 27 < 2,000 < 5% None WB Tourism and Urban Project + USAID

M=Morocco, T=Tunisia, E=Egypt, L=Lebanon, and J=Jordan

* Calculated surface areas exclude the cemeteries of Historic Cairo, the Imperial City of Meknes, and the

archaeological ruins of Tyre, Jerash, and Baalbek.



Table 5 Overview of the Main Characteristics of the Medinas included in the Pre-Operational Study

MEDINA / HISTORIC CENTRE

Population Changes

Extent of Housing

Deterioration

Properties Under Awqaf

(Habous) Ownership

Degree of Relative

Poverty**

Higher Order Commerce

Traffic, Accessibility and Parking

Problems

Condition of Infrastructure and Services

Insecurity and

Criminality

Integration with the

Urban Fabric

Institution in Charge of the

Medina

Essouaira (M) Decreasing Moderate <5% Average Significant Low Good High Good Commune / Wilaya

Meknes (M) Decreasing High 10-15% High Very significant

Moderate Fair Moderate Fair Commune / Wilaya

Tunis (T) Decreasing slowly

Moderate None* Average Very significant

High Good High Very good Municipality / ASM

Tetouan (M) Decreasing Moderate 10-15% Average Low Moderate Fair Moderate Very good Commune / Wilaya

Casablanca Decreasing High 5-10% High Significant High Fair Moderate Good Commune / Wilaya

Historic Cairo (E) Decreasing slowly

High 15-20% Average Very significant

High Poor Low Good Governorate

Kairouan (T) Decreasing High None* High Low Low Fair Low Good Municipality

Salé (T) Decreasing High 5-10% High Low Moderate Fair Moderate Good Commune / Wilaya

Sousse (T) Decreasing dramatically

Moderate None* Low Very significant

Low Good Low Fair Municipality

Sfax (T) Decreasing dramatically

High None* High Low Low Fair Moderate Fair Municipality

Sidon (L) Stable Low 5-10% NA Low Low Good NA Good Municipality

Tyre (L) Stable Low 5-10% NA Low Low Fair NA Good Municipality

Tripoli (L) Decreasing High 10-15% High Significant Moderate Fair NA Fair Municipality

Al Mina (L) Stable Low NA NA NA Low Good NA Fair Municipality

Karak (J) Stable Low None Average Significant Moderate Good Low Poor Municipality

Baalbek (L) Stable Low NA NA Low Low Fair NA Good Municipality

Jerash (J) Stable Low None Low Low Low Good Low Good Municipality

NA = not available * habous have been nationalized ** relative to urban averages



Regarding the development trends of the Medinas, in the discourse on Medinas – particularly the ‘classic

Medinas’ in the Maghreb -- there is a frequently heard narrative about their evolution and slow degradation

that can be paraphrased as follows:

Between 1930 and 1980 the Medinas have witnessed fundamental changes, due to demographic

pressures and urban dynamics. Medinas, already over populated, became attractive locations for

rural migrant families seeking the cheapest of accommodation, mainly in run down and

abandoned properties. These people were poor, mainly uneducated and ill-prepared for urban life.

At the same time the traditional bourgeois Medina families progressively decamped to villas in

the new suburbs of the cities to pursue modern, car-oriented lifestyles. They either abandoned

their old Medina courtyard houses or rented them out – room by room – to the waves of rural

migrants. The result has been the progressive pauperisation of the Medina population and the

concomitant degradation of both the housing stock and of the traditional Medina communal life.

Many private buildings of historic merit have been abandoned and others have collapsed or are

threatened with ruin. At the same time the Medinas have lost their function as the cultural and

economic centres or “soul” of the city, becoming marginalized and neglected neighbourhoods

within the larger metropolis which, itself, has more and more followed the logic of globalisation.

To what extent is this view correct? The following Sections provide a closer analysis and show that while

there has been degradation of the built environment and shifts in community and economic life, the

situation is less dire and much more complex.

3.2.1 Population Composition and Changes

One striking feature of classic Medinas in Morocco, Tunisia, and Egypt is a very significant decrease in the

Medina populations from the 1960s until now. This trend is very pronounced, and in many cases Medinas

have lost as much as half of their populations. It seems that rates of population decline have slowed and now

most classic Medinas have relatively stable population numbers. Demographic data on the historic city

centres and small archaeological towns of Lebanon and Jordan are not available, but anecdotal information

would suggest that these urban areas have also experienced declining populations, but at slower rates.

Over the recent decades the composition of the populations of Medinas has also changed. The extended

middle-class family has practically vanished, and families headed by traders, master craftsmen, religious

scholars, and professionals have also diminished considerably. Conversely, rural migrants and poor urban

families have installed themselves within Medinas because of the cheap if modest accommodation to be

found there. These poor and marginal persons find employment opportunities in the considerable informal

economies in and around Medinas.

The situation in Lebanon and Jordan is less clear. In the historic city centres of Tripoli and Sidon there are

some concentrations of impoverished families, but in the small town centres and traditional souq areas of

Baalbek, al-Mina, Jerash, and Karak populations appear to be more mixed. In any event, the populations of

these areas are extremely small.

3.2.2 Housing in Medinas and Housing Market Trends

The housing stock of Medinas is varied. Relatively few old residential structures of historic merit still survive,

and most are modest courtyard houses and apartments built or rebuilt/extended in the last sixty to eighty

years. In some Medinas such as in Cairo and especially in the small town centres in Lebanon, there has been,

in the last twenty-five years, a significant insertion of small footprint apartment tower blocks (usually ten to

fifteen floors) that have altered the skyline.

Much of the older housing stock in Medinas has gone through a slow process of deterioration. In most

medinas this situation has arisen from the out migration of the original, middle-income families from the

medinas to suburban settlements, a trend initiated in the colonial periods. These residents were



subsequently replaced by low-income migrants paying minimal rents (or squatting), living in properties

subject to multiple ownership. The rental income generated has proved insufficient for the maintenance of

the housing stock, even in cases where single ownership exists (for example in structures belonging to the

ministries of religious endowments). Private owners have had little incentive to maintain their properties. In

fact, some owners prefer that their buildings decay and collapse so they are free from tenants and can sell or

redevelop the land. The result of this process, which is still on-going in some Medinas, is a serious problem of

buildings liable to collapse. Attempts to rehabilitate or replace these buildings are major efforts in Moroccan

Medinas and, to a lesser extent, Tunisian Medinas and Historic Cairo.

One factor that has contributed to deteriorated housing in medinas is the poorly functioning formal

property markets to regulate asset registration and transfer. This situation is described in the following

Section. Obviously this factor discourages investment in and improvement of the housing stock in a medina.

Gentrification in the Medinas – in the sense of housing units being acquired and improved/rebuilt for a

higher market demand – is extremely rare. The well-known ‘Marakesh phenomenon’ has not extended to

more than a handful of cases in other Moroccan towns, and housing markets in the Medinas and historic city

centres of other countries remain until now practically immune to this kind of demand.

3.2.3 Property, Titling and Investment

One problem that is common for all Medinas, and which is perhaps the main obstacle impeding systematic

interventions, is the status of properties. This is an important cause of the deteriorated and even abandoned

housing mentioned above. Although most Medinas have some sort of property cadastre, most are

completely out of date. Few properties are registered and titled, and in most ownership is confusing,

especially as regards inheritance, relying on semi-formal and informal means of property transfer. In fact,

who actually owns a particular property is often not known, and claimants to a property can be numerous.

Many private properties (buildings) have been sub-divided and re-subdivided informally, and establishing

clear ownership has definitely discouraged private investment in Medinas. This property confusion is

compounded by the fact that renting of housing units and even rooms is extremely common, which makes

the freeing up of properties for investment difficult and also introduces the complicated dimension of social

justice into the equation.

3.2.4 Living Standards and Poverty

That the populations of Medinas and historic city centres are at or below average national urban poverty

indicators is a well-known observation, although data is rarely available to confirm the extent of poverty or

its trends. Some families, especially those living in inaccessible pockets and squatting in run-down buildings,

can be desperately poor and suffering from deplorable housing conditions. However, most Medinas still

retain elements from the lower-middle and traditional middle social strata, and there is such a variety of

social types as to defy simplistic categorizations across all Medinas. It is interesting that, although poverty

and even delinquency are considered by some to be rife in Medinas, there is very little recent hard data to

support this contention.3 Moreover, there are no available studies that show social changes over time. Are

Medinas becoming even poorer, or have older trends reversed? Are resident families showing progress in

terms of illiteracy and unemployment or not? Information on living conditions in Medinas and on their

trends could certainly be improved.

3 In the early 1990s a World Bank socio-economic study of Fez indicated that 36 percent of the population was under the

standard poverty level, a rate much higher than the national average. (World Bank, Cultural Heritage and Development: A

Framework for Action in the Middle East and North Africa, June 2001). Studies undertaken in the preparation of the Hafsia

Project in the Medina of Tunis in the 1970s and 80s also showed that poverty, illiteracy, and unemployment were higher than

national urban averages. Analysis of the 1996 census data in Cairo points to indicators of considerable poverty. A recent (2010)

study of the Tizimi quarter of the Medina of Meknès carried out a 100 percent sample survey of all 3,044 families in this

depressed area, but unfortunately did not record poverty indicators nor did it compare what it did find to national averages.



3.2.5 Conservation Conditions, Built Heritage and Adaptive Reuse

Most of the major built heritage components of Medinas and historic city centres are afforded the legal

protection of registration as national monuments. This primarily relates to mosques, madrasas, smaller

structures related to religious worship, public facilities such as fountains or charitable water dispensaries,

and some historic commercial buildings such as wikalas/khans/funduqs. The most significant historic houses

are also often registered (and are often converted into museums or left empty). Only in Tunis are particular

urban landscapes (souks) protected. The vast majority of the traditional fabric of the Medinas, supplying the

urban connecting tissue, is unregistered and under threat of collapse or redevelopment. The legal

framework for systematic adaptive re-use of historic monuments, to ensure they continue to contribute to

the economic and social life of the Medinas, is missing (see below) and clear policy guidelines in this area are

required to ensure sustainable rehabilitation.

Conservation projects, where they are carried out, tend to be focussed on specific monuments (usually

religious), and in many cases the same buildings have been restored on multiple occasions in the last

century. Meaningful ‘area conservation’ initiatives are extremely rare, and this lack cannot be substituted by

the restoration of street frontages alone without reference to interior plot conditions. Standards of

conservation are variable, and there are few dedicated permanent conservation workshops for building

crafts in any of the Medinas. Thinking has yet to progress from specific projects to long-term processes, and

monitoring and maintenance mechanisms are absent.

Urban archaeology within Medinas is almost unknown, but is should be noted that the archaeological

dimension is an important element of Medina rehabilitation (cf. Beirut city centre, Historic Cairo Eastern

Ayyubid walls) that could repay investment. The presentation of archaeological areas within Medinas and

historic city centres, though costly, creates additional heritage value as it offers another window into the

past.

The preservation of intangible heritage is furthermore a random activity. In some cases it has been

supressed (whether intentionally or unintentionally) by state parties intent on modernisation, and in others

encouraged as an important part of local cultural identity. An example of this would be the suppression

popular saint’s day celebrations in Historic Cairo versus the valorisation of the ‘Festival des Cierges’ in Salé.

3.2.6 Medina Economies, Tourism and Handicrafts

Most Medinas have thriving tourist areas, where shops are saturated with both traditional and more modern

goods and souvenirs for international and even national visitors. Of course, this kind of commercial activity

depends upon overall trends in national tourism industries which, presently, are depressed in four of the five

countries surveyed. And a Medina’s regional location is a crucial factor; those within a convenient distance

from coastal tourist resorts – such as Essaouira and Sousse – have a definite comparative advantage. In

some Medinas there are restaurants, hotels, and entertainment venues that also cater to tourists, and there

are some indications that these kinds of establishments are becoming more common.

In some Medinas, with the exception of busy tourist areas, commercial activities are in decline due to

difficult access for customers and the competition with modern malls and shopping centres in suburban

areas. However, this is not always the case and central bazaars in larger Medinas still offer higher-order and

specialized retail goods and services that attract clientele from other parts of the city. The souqs of the

Medinas of Tunis and Casablanca, and the Muski - ‘Ataba bazaar areas of Historic Cairo are cases in point.

Small-scale manufacturing and handicraft production in Medinas, once an important economic activity, is

definitely in decline, due to accessibility problems and changing tastes. However, in some Medinas

workshops and small industries still thrive, for example shoe manufacturing in Historic Cairo and in Sfax.

However, many of these industry clusters have environmental problems associated with them.



Traditional handicraft production and sales in Medinas are, almost without exception, in decline and have

been for decades. This has resulted in an irreversible loss of the important skills and knowhow that underpin

such economic activities. Tourism has helped slow this decline, and in many Medinas there are continuing

efforts by government, municipalities, and NGOs to support artisanal collectives, revive skills, and provide

new outlets for their products, with mixed success. There is relatively little awareness that craft skills can

and should be used to create modern products, and that there is a value in the traditional skill that goes

beyond the purely traditional product.

3.2.7 Traffic, Accessibility and Parking Problems

Almost all Medinas and historic city centres suffer from traffic congestion and lack of parking. This is to be

expected given that they are located in the epicentres of what are often huge urban agglomerations and

that vehicular access into Medinas is either non-existent or limited to a few main penetrating roads. This

causes tension on the periphery, where vehicles need to park and off-load. Many municipalities have created

peripheral parking lots and even in some cases multi-storey parking garages, but the ever-increasing

demand for space always exceeds supply.

Public transport (bus, tram, and in some cases metro) access up to the edge of Medinas is usually adequate –

at least as good as in other central urban areas.4

However, circulation inside Medinas is mostly by foot,5

although there is a trend towards increasing use of motorized two-wheeled vehicles.

One of the great values of Medinas is the fact that most parts are pedestrian only zones unspoiled by

vehicles, with significant environmental and lifestyle advantages. In comparison to modern urban districts,

the pedestrian nature of Medinas gives them a head start in sustainable urban development The argument is

made in a recent study that this is a strength that should be capitalised on, and that there are a number of

measures that would maintain and even extend pedestrian zones and improve accessibility within and into

Medinas, mainly through better control at the break-points, the introduction of specialized down-sized

vehicles, better pavements, and other simple measures.6

However, in the Medinas visited in this present

Study practically none of these measures were yet in evidence. It would be worth assessing previous parking

and traffic control efforts for lessons learned, particularly those carried out in Karak, Jerash, Sidon,

Essaouira, and Meknes.

It should be added that the Medina traffic and accessibility issue is one faced by all Medinas and historic city

centres throughout the region, and it represents a subject that could well benefit from an exchange of

experiences, raised awareness of the application of new solutions and appropriate green technologies, and

comprehensive traffic solutions.

3.2.8 Public Infrastructure and Social Services

In both Medinas and historic city centres in the five countries various government agencies have made

tremendous efforts over the last twenty to thirty years to improve basic urban infrastructure and services in

the Medinas, to the extent that water, wastewater, telephone and electricity coverage is near-universal, and

there are very few public ways and spaces that are not paved and otherwise improved.7 Social services such

as schools and health centres are also adequate although one could in some cases criticise the quality of the

services offered.

4 In some cities (such as in Alexandria and Cairo) new metro lines are planned which will skirt Medinas and penetrate historic city

centres, and these projects will dramatically improve people accessibility and reduce the need for surface vehicles. 5 In Tizimi, part of the Medina of Meknes, a survey revealed that 81 percent of trips made by residents were exclusively by foot. 6 Co-operation for Urban Mobility in the Developing World (CODATU) / Transitec, September 2012. ‘Medina Accessibility: a

guide for policy makers’ [Jointly funded CMI, AFD, EIB, WB study]. 7 Outstanding examples of public infrastructure and street-scape improvements can be found in Tunis, Kairouan, and Jerash. In

Historic Cairo large infrastructure as well as complete streetscape improvements along one major artery have recently been

carried out.



There are pockets in some Medinas where wastewater services are poor and surface drainage is insufficient.

Also, the pipes and cables associated with basic infrastructure services are frequently installed haphazardly

and can compromise the aesthetic of streetscapes, a problem that is usually addressed as part of the many

projects that address special tourist circuits in Medinas. (See also Section 2.6 below).

3.2.9 Insecurity and Criminality

Insecurity is said to be a problem in some Medinas, especially off the main routes and after dark, with pick

pocketing and mugging the most common complaints. Drug dealing also takes place in Medinas. It is not

known to what extent these are real concerns and to what extent they are a myth, but the result is that

many visitors completely avoid certain Medinas after dark. As a consequence few tourist-oriented

establishments, of which there are many, stay open in the evenings in some Medinas of Tunisia and

Morocco.

3.2.10 Physical and Economic Integration of the Medinas within the Larger City Fabric

Some observers consider that Medinas are isolated, un-integrated, and marginalized backwaters within the

larger urban context. For most Medinas it is hard to accept this view. Classic Medinas studied as part of the

Medinas 2030 Programme retain vibrant ‘higher-order’ commercial activities in their traditional souqs. They

are easily accessible, at least up to the Medina perimeters, by both vehicles and public transport, although

parking and congestion remain an intractable problem. Usually the inhabitants of adjacent residential

quarters are not appreciably better off than those in the Medinas. In effect, it seems that ‘marginalization’ is

a vague and somewhat pejorative concept. Certainly the Medinas and historic city centres studied here are

less isolated and marginalized than the vast and growing peripheral poor informal areas that ring most

urban agglomerations.

3.2.11 Building the Knowledge Base of Medinas

In the review of Medinas and historic urban centres undertaken in this Study, one striking fact that emerges

is the lack of precise and focussed knowledge about major issues affecting Medinas. Specifically, it would

seem that improved, more up-to-date knowledge about the inhabitants of Medinas and recent socio-

economic trends is needed to better inform those who are encouraging a greater social diversity in their

population. Also, better information is needed about the economies of Medinas, their investment

opportunities, and their real estate markets. There seems to be no systematic information about land values

and land exchange in various parts of Medinas, the parcels that are registered, demand for different types of

housing or even about recent property transfers and recent property investments. Also, calculations of

indirect financial returns (through increased property and VAT taxes receipts, etc.) resulting from past public

space investments are unknown. Finally, it would seem only logical that in each Medina there be up-to-date

GIS-based plot-by-plot inventories of all properties that record and maintain up-to-date layers on

ownership/registration status, buildings of historic/architectural merit, buildings liable to collapse, and other

data that would better inform municipal and other decision makers. Most Medinas are not, after all, very

large and thus such systems need not be complicated or expensive to set up. Some municipalities have

begun the first elements of such systems and should be supported in completing them.

3.3 Current Frameworks, Initiatives and Approaches to Medina Conservation and Rehabilitation

The study focused on the existing frameworks, initiatives and approaches to Medinas conservation and

rehabilitation within the five countries and their Medinas.

3.3.1 Legal Frameworks for Medina Conservation and Rehabilitation

In all five countries there are sets of laws, decrees, and amendments governing the protection of national

monuments, antiquities, and archaeological sites. These legal frameworks also specify national institutions



(usually ministries) that are responsible for listed monuments and heritage protection in general. In some

cases this legislation dates from the colonial/protectorate periods. Associated with them are lists of specific

monuments and buildings and archaeological sites that fall under such legal protection, including in some

cases reference to “buffer zones.” Many of the most important historic monuments and structures found in

Medinas and city centres are legally protected in this way. However, in no country is there legislation that

specifically declares a whole Medina or historic city centre (or even part of one) as falling under such legal

protection, nor are specific institutions charged with exclusive responsibility for such.

Table 6 Legal and Institutional Framework for Medinas Rehabilitation

LEGAL / INSTITUTIONAL

ASPECT

Morocco Tunisia Egypt Lebanon Jordan

Legislation exists to list and

protect/preserve historic monuments

and sites

Yes

Latest 1980s

Yes

Latest 1994

Yes

Latest 1983

Yes

Latest 1933

Yes

Latest 2006

National institution(s) responsible for

cultural heritage

Yes Yes Yes Yes Yes

Legislation protecting private

buildings of historic or architectural

value

No Enabling

legislation

only

Yes No No

Laws protecting historic urban fabric

and streetscapes of Medinas

No No No No No

Legislation allowing expropriation of

deteriorated properties for

redevelopment by the State

Only in case

of imminent

collapse, and

not the land

parcel

No No No No

Functional property registration and

cadastre systems covering medinas

Yes, but many

properties not

covered

Yes, but many

properties not

covered

Yes, but

completely

dysfunctional

Yes Yes, but out

of date

National-level institution dedicated

to Medina protection and

rehabilitation

No, but

currently

under

formation

No No No No

As frequently pointed out by observers, this legal and institutional framework is imperfect, since in no cases

is the protection and maintenance of Medina cityscapes and the historic city fabric – what is often called a

‘conservation area’ – considered an important element of heritage protection. However, in each country

planning legislation exists that requires city master plans, structure plans, and/or detailed urban

development plans. In most cases these planning documents and their executive regulations make specific

reference to historic city areas and prescribe special development controls over new construction in these

areas. These controls normally limit heights of new construction and may specify maximum Floor Area

Ratios, but make no prescription on materials, massing, style, or typology.8 In most countries enforcement

of these controls is no better than adequate. Currently in Historic Cairo, partly due to political events,

development control is non-existent.

Even with special planning regulations and good enforcement, the owners of private, non-listed structures

of historic or heritage value in Medinas are usually free to modify and rebuild these structures as they wish,

with effects that frequently violate the architectural integrity of an area and its streetscapes. This is a

common complaint in Medinas in Morocco and Tunisia, and in Lebanon and Jordan real estate

8 In Egypt, Historic Cairo has been declared a “special characteristic” zone in which existing property and building lines are to be

respected (cancelling earlier street widening plans) and the height of new construction limited to two to three floors as per

decree of the Governor of Cairo.



developments in and around the provincial town centres have already irrevocably altered any architectural

integrity that once existed.

Regarding legislation for the adaptive re-use of registered historic monuments, it is unclear whether any of

the government stakeholders (e.g. Ministries of Culture, Tourism, Antiquities, or Endowments) in any of the

countries included in the Medinas 2030 Pre-operational Study have seriously considered drafting new

regulations that would permit the respectful re-use of properties by lessees for purposes other than that for

which they were originally constructed. For example, if revenue-generating activities such as restaurants or

hotels were to be inserted into a historic structure, a clear set of rules would have to be drafted that defined

the limits of what could be done in terms of new construction and even demolition to create the appropriate

environment for successful re-use. And this implies a level of experience currently lacking in many of the

government authorities charged with heritage protection. This sticking point is the principal reason why

museums and cultural centres are the only types of activity found in converted registered historic structures

in Medinas.

Allied with a requirement for legislation establishing parameters for adaptive re-use is a requirement to

create a more nuanced and inclusive system for the registration of historic structures that pays much more

attention to the urban fabric and much more attention to the specific characteristics of any built context

that actually provide its ‘added-value’. For example, a street in a Medina might have a particular pattern of

doorway, or even door-knockers, which makes that street unique. What legislation currently exists to stop

the doors from being removed and sold? At the same time, the building plots behind the doors are unsafe

and derelict. Can freedom be given to save the façades and rebuild the interior courtyards completely and

how far should the use of modern materials be legally determined in these circumstances? It is only through

attention to such detail that the essential spatial and physical characteristics of Medinas can be preserved, at

the same time creating favourable conditions for successful re-use that guarantees a durable future.

3.3.2 Policies, Institutions and Management of Medina Rehabilitation

First, it should be underlined that none of the five countries have yet to adopt anything approaching a

national strategy/policy and/or national-level institution dedicated to the rehabilitation of Medinas or

historic town centres. However, elements of national policies towards Medinas can be found in most

countries, as follows:

Morocco is the only country currently considering such a national approach, and policy dialogue on the appropriate legislation, institutions, and funding is in progress under the sponsorship of three ministries lead by the Ministry of Housing. Also, through the work of Urban Agencies (regional planning bodies under the Ministry of Housing) and specialized committees, comprehensive rehabilitation and upgrading plans have been prepared for a number of Medinas. In addition, Morocco is unique in that it has created a dedicated executive agency with State powers for the Medina of Fez (l’ Agence de developpement et rehabilitation de la Medina de Fez [ADER-Fez]) that has been active with a number of rehabilitation initiatives, both in the past and currently.

Tunisia has elements of Medina-specific rehabilitation strategies and programmes embedded in city planning documents, and in addition Tunisia has developed unique institutions at the Medina level called “Associations de la sauvegarde de la Medina” (ASMs). These are dedicated civil associations made up of concerned professionals and inhabitants that work closely with the municipalities to promote conservation and rehabilitation in their respective Medinas. The ASM of Tunis is particularly important and has sponsored and coordinated a number of award-winning rehabilitation projects.

Neither Egypt, Lebanon, nor Jordan have Medina or town centre-specific rehabilitation strategies and programmes, nor do they have local level institutions dedicated to rehabilitating these areas. However, in Lebanon the CHUD project under CDR has developed certain programmatic approaches for dealing with historic city centres and CDR has acquired considerable experience dealing with rehabilitation



issues.9 And similarly in Jordan there are elements of national strategies for historic city centres and adjacent archaeological areas that have been developed under the Ministry of Tourism and Antiquities. In Jordan developing new and diversified tourist projects seems a paramount element of its strategic approaches towards historic towns. In Egypt the Ministry of Culture has led and financed most recent rehabilitation works in Historic Cairo, but there are other agencies and other budget streams involved. Coordination among the various actors has been deplorable to date, and by no means could it be said that there is any comprehensive strategy or plans of even thinking for the rehabilitation of Historic Cairo.10

The prime institutional actors for historic rehabilitation in each of the five countries are either national

agencies or city-level authorities. Those with activities in Medinas at the national level are ministries and

their branches or specialized agencies, and in every case these have nationwide development or heritage

mandates. They may from time to time take on specific tasks in Medina rehabilitation and cultural heritage

protection, but their main remits are much larger and more important. Examples of these national agencies

with some experience and expertise in Medina or historic city rehabilitation include:

ARRU in Tunisia (mainly dealing with the upgrading of underserved urban areas and slums)

CDR in Lebanon (the government’s apex super ministry in charge of all economic, physical, and social development efforts countrywide)

The MSA/SCA in Egypt, which although a very important player in Historic Cairo, also manages historical monuments and archaeological sites throughout the country, including the very extensive Pharaonic sites as well as Coptic, Graeco-Roman, and Islamic monuments.

The Ministry of Housing and Urban Policy in Morocco (an extremely important ministry for both planning and housing nationwide) and Al Omrane (a State-owned company whose main work is in building housing estates and new satellite cities in various regions of the country).

The Ministry of Tourism and Antiquities in Jordan, whose main activities are country-wide and include managing all antiquities sites and also promoting tourism and developing tourist projects.

Religious endowment authorities in all five countries (habous, awqaf, or their successors in the case of Tunisia), who manage significant numbers of historic properties in most Medinas, and sometimes carry out the rehabilitation of buildings, usually in partnership with other agencies.

In all five countries the main city-level institutions with important roles in Medina rehabilitation and

revitalization are the municipalities, although sometimes higher-level local authorities are also involved,

such as governors and walis.11 These municipalities have many development issues to address, and their

9 In Lebanon it should be noted that there is the unique experience of the redevelopment of Beirut’s old city centre by the

development company Solidere, empowered by specialized legislation. 10 A UNDP-financed comprehensive plan for Historic Cairo was developed in 1997 but remains largely ignored. The Aga Khan

Development Trust has carried out extensive efforts to rehabilitate monuments and public spaces, to improve housing, and to

engage the community in the Darb el Ahmar part of Historic Cairo, but the project is closing and has not developed any

comprehensive plans. UNESCO’s World Heritage Centre, under its on-going Urban Regeneration Project for Historic Cairo

Project (URHC), has just produced its first report which includes some recommendations to control development and preserve

streetscapes, but the ultimate impact of this work on the main players is unknown as it remains a policy proposal that has yet to

be adopted by the Egyptian Government. 11 The municipality that has had the most active role in medina rehabilitation of all the 17 medinas is probably the municipality of

Tunis. Other municipalities also have played instrumental roles, but usually in close coordination and under co-financing

arrangements with national level institutions. Examples of this coordination at the strategic planning level include Essaouira and



main preoccupation is managing the very rapid growth and evolution of the, sometimes huge, urban

agglomerations within their boundaries. Many municipalities, especially in Tunisia and Morocco, have made

considerable efforts to improve their Medinas, but with their other duties it is understandable that they

sometimes cannot devote full attention to the complex challenges being faced by Medinas. Also, as

mentioned in the following Section, municipalities are in most cases financially and technically weak,

remaining beholden to central government control and budgetary allocations. Municipalities in Morocco,

Tunisia, and Jordan can take out development loans, but almost never do so. Municipalities in Lebanon and

Egypt cannot borrow.

In none of the five countries can it be said that there is a dedicated rehabilitation agency with total remit

over a specific Medina or historic urban centre. The closest example is ADER-Fes which is a rehabilitation

agency that operates in Fes al-Bali. This agency was set up in the 1980s and has carried out a number of

projects. Although it can accept loans from IFIs, such credits must be sanctioned in advance by the DGCL in

the Moroccan Ministry of Interior. The model of ADER-Fes has not been replicated, to date, in any other

Moroccan cities. It should be added that in Tunisia there is the phenomenon of very active ASMs, civil

associations whose sole objective is to try to preserve and revitalize Medinas in partnership with the relevant

municipalities. These organizations, however, have no defined legal status.

In summary, it is apparent that actions addressing the considerable physical, social, and economic

challenges facing Medinas and historic urban centres must face an institutional landscape that is far from

perfect. There is a multiplicity of actors at various levels and a lack of institutional focus. These factors make

coordination a constant struggle. In effect, there is no structured “management” of Medinas except when

there is a large, multi-sector,, integrated project that focuses on a particular Medina and generates the

necessary funding for rehabilitation.

3.3.3 Funding and Financing of Medina Rehabilitation

In all five countries standard funding mechanisms for Medina rehabilitation could be called “free-ride”

mechanisms. They have been and continue to be, from the point of view of the implementing agencies,

mainly grant funded through government budget allocations. These grants are of three main types:

Structured funding of integrated projects, mainly under sovereign loans by IFIs through central government and allocated either directly to municipal authorities or through project implementation units

Annual budget allocations from central government, either directly to State implementing agencies or to municipalities through the ministry responsible for local authorities. These tend to be rather ad hoc and sometimes precarious.

Targeted donations by special endowment funds and particular foreign development and conservation institutions. These are mainly aimed at the conservation of heritage monuments, but may also have a wider Medina rehabilitation scope (such as the Hassan II Fund in Morocco and the Aga Khan agencies in historic Cairo.)

It is important to underline that in both Medinas and historic city centres rehabilitation projects with whole

or even partial financial return or cost recovery have been rare. Innovative and non-traditional financing

tools for Medina rehabilitation are practically unknown in any country. And public-private partnerships for

Medina rehabilitation are very uncommon, in spite of some attempts under integrated IFI-supported

projects to launch PPP components.

Tetouan, due to the support of the wali (or governor) and with technical support from the respective Agences Urbaines (under

the Direction de l’Urbanisme in the MHUPV).



MSME and micro lending programmes are, by contrast, very common in all five countries, using commercial

banks, NGOs and dedicated microfinance institutions. Yet in most cases these are country-wide in scope and

are not specifically targeted to Medina residents, enterprises or investors.

Lending for house improvement in Medinas is rare, but there is an interesting case of a mortgage-backed

loan system for property owners in the Medina of Tunis. Also, the Aga Khan Development Trust has had a

small pilot grant plus loan programme for housing unit improvements in the Darb al-Ahmar area of Historic

Cairo.

There are no known dedicated/earmarked funding mechanisms for Medina rehabilitation, either at the

national or local scale. In other words, there are no special dedicated levées or a percentage of taxes that

generate revenues year after year for Medina rehabilitation efforts. Similarly, there are almost no known

dedicated endowments for the sustainable financing of Medinas, such as rent-generating properties or other

assets whose returns are earmarked for Medina rehabilitation or improvement. There is, however, the case

of the recently-established community development NGO “al-Mazalla” in Historic Cairo, whose basic

financing comes from a share of the revenues from the al-Azhar Park and an associated parking garage and

commercial centre (under construction). Also, it should be noted that the Moroccan government is

considering the imposition of a tax on the sale of construction sand that would be used for funding Medina

and housing (HMR) works.

Private sector investments in Medinas are mainly in housing and small-scale improvements in commercial

premises, and less frequently for the adaption of old structures or the construction of new premises for

handicrafts display and tourist-oriented restaurants and small hotels. Investment in new housing units by

developers is almost unknown in the Medinas of Tunisia and Morocco.

It should be added that local authorities in all five countries suffer from poor own-source revenues and

depend on central government for most capital investments. In spite of years of support programmes for

these municipalities, they remain financially weak and lacking in technical capacities. And, as elected

officials (except in Egypt), municipal leaders are frequently buffeted by local politics, especially in the

contemporary political climate. Furthermore, for property taxes, building permit regimes, registration

charges, the sale of development rights etc., the collection of revenues is usually very poor and sometimes

open to corruption. Thus caution is required when considering finance mechanisms for Medinas that are

incentive linked, such as are common in Europe.

3.3.4 Overview of Past and On-going Rehabilitation Initiatives

In all five countries there have been decades of efforts to rehabilitate Medinas and historic city centres.

These have been carried out by national and local agencies, NGOs, private foundations and other partners,

frequently supported by international donors and IFIs. To generalize, there are five major categories of

initiatives and interventions, as shown in Table 4:

Table 7 Main Types of Rehabilitation Initiatives in Medinas and Historic Urban Centres

CATEGORY OF

REHABILITATION

Examples

Heritage protection /

preservation / conservation

Restoration of mosques, zaouias, madrasas, kasbahs (citadels), walls and

gates, khans, caravanserais, covered bazaars, etc. Also the construction and

renovation of museums and renovation of important historic houses

Public space improvements,

infrastructure, public services

Establishing tourist circuits, paving, landscaping, street lighting,

embellishing public squares, upgrading infrastructure, rehabilitating schools,

post offices, police stations, health care etc.

Private building improvement

Repair of deteriorated housing, improving building facades, demolition of

collapsing buildings and resettlement of inhabitants, loans for housing

improvement, loans for business development including hotels and



CATEGORY OF

REHABILITATION

Examples

restaurants, etc.

Social and economic

development, including

supporting private investment

Loans to small and medium enterprises, micro credit for income generation,

support for businesses, vocational training and ant-poverty programmes,

building social housing (rarely), etc.

Commerce and traditional crafts

support

Repair and improvement of traditional bazaars and associated building and

spaces, creation/rebuilding of space for ateliers and for product outlets,

small loans for producers, support to producer collectives, marketing

support.

Although some initiatives may be bundled into large investment projects with single implementers,

practically all efforts are basically composed of a large number of small, discrete interventions that span a

number of development sectors and involve a number of partners. It is in the nature of Medina rehabilitation

that this is so, and as a result such issues as coordination, project management, and overhead administrative

costs are a constant challenge. Taking a straightforward example: the development of tourist circuits in a

Medina (always grant based) will involve several infrastructure authorities, the municipality, the roads

authority, the house owners, the shop owners, the ministry of culture officials, the religious endowments

office, and of course several different contractors and service providers.

Large integrated Medina and historic city centre rehabilitation projects are usually conceived jointly by IFIs

and national agencies and are financed by loans backed by sovereign guarantees. All of the five countries

except Egypt have had at least one of these, and some have had several. They tend to have a number of

components that cover at least some aspects of the five general types of interventions.

Initiatives may come from local or national authorities, although national sponsorship seems to dominate

and, certainly, financing tends to come from the national-level (either from national budget allocations to

ministries or municipalities or from IFI sovereign loan projects or donor grants administered through central

authorities).

In the past there have a plethora external stakeholders and funders, such as the World Bank, USAID, AFD,

the Aga Khan, GIZ, JICA, UNESCO, and a number of different EU Mediterranean programmes in Medina

rehabilitation. Technical assistance and capacity building are almost always important features. As far as is

known, however, in the five countries covered there are currently no investment projects under preparation

by these external agencies aimed mainly at rehabilitation of Medinas and/or historic city centres.

It is important to understand which Medinas have already been exposed to such major donor-assisted

rehabilitation projects. Since these projects tend to be comprehensive or “integrated”, and involve

considerable prior study, they represent experiences that can be learned from and may point towards

additional initiatives that might be studied. On the other hand, such prior or on-going projects may have

already exhausted most of the rehabilitation potentials to be found in a particular Medina or historic city

centre, particularly in the smaller ones (Lebanon and Jordan). Table 8 presents the 17 Medinas and notes

recent or on-going large, multi-sectoral donor-assisted projects. For detailed descriptions of these donor

projects, see the Country Reports in Volume Two.

In some cases evaluations or assessments of the success and impact of major donor projects listed in Table 8

have been carried out. The World Bank projects are assessed after they end in “project completion reports”,

which are available for the Fez and Tunisia projects, and they are very useful. For example, the Fez project

was assessed overall as “unsatisfactory” for a number of reasons, and important lessons learned were: (1)

Reversing the urban decay of historic cities is a long-term endeavour; (2) Social participation is essential for

the successful rehabilitation of the historic housing stock; (3) The tenure of land and buildings is a critical

difficulty in the rehabilitation of historic cities; (4) Municipalities should consider delegating urban

rehabilitation operations to competent agencies; and (5) Urban rehabilitation projects should be designed



according to simple objectives and design.12 Such constructive criticisms are not always carried out for non-

World Bank projects. For example there are no available assessments of the Aga Khan project in Historic

Cairo nor of USAID’s projects in Fez and Jordan (probably because these projects are still running). It is of

obvious importance that lessons learned from these rehabilitation projects be studied with care during the

design phase for integrated IFI-financed projects which are to be part of the Medinas 2030 Investment

Programme.

Table 8 Prior Major Donor-Assisted Project in Medinas

MEDINA Project and Status Type Project Costs

Donor-contributions

Fez (M) World Bank “Fez Medina Rehabilitation” 1998-2005, multi-sectoral Status: closed 2005 Public space and traffic improvements in Fez al-Bali; capacity building Promoter: ADER-Fès (delegated by Ministry of Interior)

IFI finance under sovereign loan

US$ 27.6 million

WB loan US$ 9.6 million

USAID Millennium Challenge Corporation; “Artisan and Fez Medina Project” 2008-2013 Status on-going Handicraft support and major rehabilitation of one area of Fès Main promoter: ADER-Fès (delegated by Ministry of Interior)

Full grant financing

US$ 111 million

US$ 111 million

Sousse Kairouan Tunis (T)*

World Bank “Tunisia Cultural Heritage”, 2001-2011 Status: closed Dec. 2011 Strengthening of the legal and institutional framework, development of cultural products, and site development Main Promoter: Ministry of Culture


US$ 23.8 million

WB loan US$ 17 million

Sousse Kairouan Sfax (T)

Agence Francaise du Developpement "National Rehabilitation Program of Lower Income Areas” (PNRQP) component Quartiers Anciens, Started 2010: Status on-going Mainly public space improvements and visitor circuits. Main Promoter: ARRU


Euro 5 million (visitors circuits only)

unknown

Historic Cairo (E)

Aga Khan Trust for Culture, “Darb al-Ahmar Community Development Project” and “Al Azhar Park,” 1998-2012; Status: Closed 2012; Main promoter: local company and NGO set up by the AKTC

Foundation grants

unknown unknown

Tyre Sidon Tripoli Baalbek (L)

World Bank, Italian, and AFD co-financing, “Cultural Heritage and Urban Development Project” (CHUD), 2004 – 2009 extended to 2014/2017 [also includes city of Jbeil]. Rehabilitation and urban infrastructure improvements and archaeological sites conservation and management Promoter: Council for Development and Reconstruction


US$ 150 million

US$ 62.5 million plus additional financing US$ 27 million (WB) and 21 million (AFD)

12 World Bank, Implementation Completion Report, (Scl-44020 Scl-44030 Tf-29646) on Two Loans in the Amount of Euro 8.9

Million to the Kingdom of Morocco and the Municipality of Fes for the Fes Medina Rehabilitation Project, June 2006. For the

Tunisia Cultural Heritage Project the overall rating was “moderately unsatisfactory.” See World Bank, Implementation

Completion and Results Report (IBRD 7059-Tun) on a Loan in the Amount of Eur 19.2 Million (US$17.0 Million Equivalent) to the

Republic of Tunisia for a Cultural Heritage Project, June 2012.



MEDINA Project and Status Type Project Costs

Donor-contributions

Karak Jerash (J)**

World Bank: “Cultural Heritage Tourism, and Urban Development Project” [also includes Madaba, Ajlun, and Salt] 2007-2013 Status on-going Improvement of public spaces and historic buildings, traffic and parking, local economic development Main promoter: Ministry of Tourism and Antiquities


US$ 28 million

US$ 17 million

Karak Jerash (J)

USAID/Jordan “Tourism Development Project II” also called Siyaha, (2008-2013) Status: On-going Archaeological site management, interpretation and investment promotion in Petra, Amman and Jerash; Main promoter: Ministry of Tourism and Antiquities

Grant US$ 31.5 million

US$ 31.5 million

Note: M=Morocco, T=Tunisia, E=Egypt, L=Lebanon, and J=Jordan

* Note that there was an earlier World Bank loan for a previous project in Tunisia: Third Urban Development Project”, 1982-1993;

valued at US$ 25 million, which included some Medina rehabilitation in Tunis and in other towns

** This project was preceded by two other World Bank projects, First and Second Jordan Tourism Projects

It needs to be emphasized that the rehabilitation projects listed in Table 8 do not include a considerable

number of smaller grant-based projects financed by various donors in the Medinas 2030 target cities. Many

of these have been developed under EU-financed programmes and involve planning, awareness raising,

capacity building and exchange of expertise, signage and promotional literature. Other small projects have

been financed by private foundations, by foreign cultural institutes, and by Gulf states. See the Country

Reports in Volume Two for details. In conclusion, it should be clear that a number of initiatives have been

undertaken by various sponsors to support various Medinas.

3.4 Current Country Trends that may Impact a Sustainable Medinas 2030 Investment Programme

It is important to summarize the recent impacts of the Arab Spring in the five countries surveyed, especially

as they relate to the region’s Medinas and any potential Medinas 2030 Programme that will be implemented

over the next few years.

First, the Arab Spring has generated serious political uncertainties that affect governance in Egypt, Tunisia, and (to a lesser but still significant extent) Lebanon and Jordan. Even Morocco is not immune. Reform of constitutions, government structures, and electoral processes is underway, and while welcome, this reform has generated major uncertainties. Some elements of government, particularly local government, are nearly paralyzed, at least as far as taking important decisions is concerned.

Due to falling revenues and accumulating national debt, governments in all five countries (with the exception of Morocco) are currently under severe fiscal constraints and there is stiff competition among government agencies to capture a share of the dwindling discretionary budget. Given that in all countries rehabilitation efforts in Medinas rely largely on grant budgetary allocations, it is inevitable that some of the financial flows towards Medina projects will diminish and even dry up.

In the current uncertain political climate it is difficult to attract direct private foreign investment, especially in tourism and other sectors from which Medinas could benefit.

In most Medinas a major reliance is put on tourism benefits to justify Medina investments but international tourist flows in all countries except Morocco are significantly below average and will



probably remain so for some time, rosy proclamations emanating from ministers of tourism notwithstanding.

There is considerable sympathy among external players for the Arab Spring and this has already translated into both financial and technical support for these countries coming from international and bilateral donors. In this climate, raising external commitment and funds for Medina rehabilitation should be easier.

This review of the impact of the Arab Spring should not diminish enthusiasm for a Medinas 2030

Programme. One expects most negative impacts to disappear within the next two to three years, while

external interest in and support for Arab Spring countries is likely to grow. Thus, there is a need to plan for

an approach that prioritizes countries and that takes preparatory steps today to be ready for programmatic

investments and activities tomorrow.



4 Value-Added and Rationale of a Medinas Investment Programme

In this Section, attention is given to the underlying socio-economic dimensions and rationale of Medinas and

related investment in Medinas rehabilitation and preservation. The Pre-Operational Study was not intended

to quantify the socio-economic or investment effects of Medinas. Such quantification for urban heritage and

historic renewal is by definition difficult due to the complexity of socio-economic causalities and the

difficulty of determining monetized values , and for the Medinas it is impossible due to the absence of

reliable data for the countries and Medinas covered. The focus in the analysis is therefore placed on the

underlying socio-economic relationships and causalities, drawing especially on the related literature, rather

than a quantified cost-benefit analysis at programme level. As noted however, we do see a role for cost-

benefit analysis within the Investment Programme related to individual projects and investments.

The analysis in this Section covers first the causalities and economic principles underlying Medinas and

questions whether and how Medinas add value to cities and countries. Second, focus is placed on the

business case related to Medinas, and to the specific challenges and issues regarding value-capture from

Medina rehabilitation. In the status quo situation in which the potential value of Medinas is deteriorating and

being lost to society, the analysis in the third section highlights the relevance of the Investment Programme

to facilitate a trend reversal. Recommendations for approaches to evaluate economic value creation in

Medina rehabilitation projects are made. The analysis concludes that there appears to be a defendable

rationale for an Investment Programme in the rehabilitation and preservation of the Medinas.

4.1 Investment Rationale – Do Medinas Add Value to Cities and Countries?

It is generally believed that historic city centres (such as Medinas) can have substantial economic value, and,

therefore, that historic preservation is a sound investment.13 Three categories of values of historic city

centres can be identified:

authenticity value;

avoided costs of new buildings and infrastructure;

non-use value.

4.1.1 Authenticity value linked to tourism

An historic city centre has a distinctive and unique appearance that is lacking in many modern city centres.

The buildings, often belonging to different historical areas with different building styles, are more diverse.

They also display more craftwork than modern, functional buildings. The configuration of streets and

squares is characteristic and often unique. Even the mere knowledge and consciousness that one is in a

location that has been in use for many centuries and that has witnessed many historical events creates an

emotional sense that adds value to a place.

The greatest economic value of authenticity lies in the opportunities for the development of tourism and all

associated activities: accommodation, catering, souvenir shops, museum visits, etc. But there are also other

functions that benefit from an authentic location: retail trade (an authentic setting adds to the shopping

experience), residential function (an authentic setting adds to the quality of the living environment) and

offices (the authentic setting confers a distinctive image on the occupant of the offices, which is important

for some types of service providers, especially in the creative and cultural sector).

13 For a broad review see Randall Mason (2005), Economics and historic preservation: A guide and review of the literature,

discussion paper prepared for The Brookings Institution Metropolitan Policy Program. Other cases and discussions are presented

in the minutes of international conference on Urban heritage in Europe and the Mediterranean: economic and social development

(Arles, 22 and 23 April 2010, organized by Alliance of European Cultural Cities (A.V.E.C.) and in the Proceedings of the Xth

International Conference of the Organization of World Heritage Cities (Quito, 2009), devoted to the theme of Historic Cities and

their Survival in a Globalized World.



Although some observers prefer that Medina rehabilitation is not beholden to the needs of cultural tourism,

it is a fact that much of the potential for socio-economically attractive (and financially profitable) public and

private investments directly relies on international or local tourism (hotels, restaurants, shopping, handicraft

emporiums, museums, festivals, etc.) or aims indirectly to attract tourists (monument restoration, walking

circuits, signage, parking, building renovation, museums, etc.).

This importance of the tourism industry was highlighted in a recent World Bank report on the investment

potential in Moroccan Medinas.14 This report recommends that investments focus on the Medinas with the

highest cultural heritage, with the highest economic potential, and with the greatest needs of the resident

population. It underlines that sustainable tourism development is crucial and that Medinas need to be

looked at in terms of their regional tourist potentials. A “Tourism Potential Index” for all 31 Medinas in

Morocco was prepared, using eight factors or criteria, as follows:15

The importance of heritage assets: the urban and architectural quality of the historic ensemble, its state of conservation and presentation, and its classified monuments.

Classification on the UNESCO World Heritage List: the international visibility of this registration will do much to boost a site's tourism potential.

Proximity to the sea or to natural or archaeological sites: possible combination of recreational and cultural tourism, or of ecotourism with cultural tourism.

Adjacent tourism basins: geographic positioning close to tourist destinations will create opportunities to tap existing demand.

Level of accessibility: the presence of an airport, direct national or international connections, and highway accessibility will significantly increase the tourism potential.

Accommodation facilities: the presence of hotels and guest houses adequate to meet demand is essential for attracting flows of visitors.

Cultural festivals and traditional celebrations: seasonal attractions that can enhance the visibility of the historic town and can trigger a process of growth.

Significant handicraft activities and trade in objects of cultural content: such elements are an essential part of a historic town's attractiveness.

In the World Bank study the tourist potentials of all 31 Medinas in Morocco were assessed using these eight

criteria, with each receiving a yes/no rating. These ratings were summed and thus a Medina received scores

of between 0 and 8.16 Using the same criteria and methodology as used by the World Bank a preliminary

ranking in terms of sustainable tourism potential of the 17 Medinas in the Pre-Operational Study has been

developed (ratings for the Moroccan Medinas have been taken directly from the World Bank report) in Table

9.

14 Kingdom of Morocco, “Development strategies for Morocco’s historic towns,” World Bank Policy Note, Final Report, June

2008. 15 Ibid, p. 45. 16 Those scoring the highest were Marrakesh with 9 points (an additional point was added since Marrakesh has a double

registration on the World Heritage list) Essaouira with 8 points; Fès and Meknes with 7 points; Tétouan, Rabat, Tangier, and al-

Jadida with 6 points; and Casablanca with 5 points.



Table 9 First Round Ranking of Pre-Operational Study Medinas According to Sustainable Tourism Potential17

MEDINA

UNESCO

Heritage

site

Important

heritage assets

Good access

by air/land

Quality of

hotels

Near to sea

or nature

sites

Cultural crafts

& SMEs

Cultural

festivals

Nearby

tourist basins

SCORE

Essouaira (M) YES YES YES YES YES YES YES YES 8

Meknes (M) YES YES YES YES YES YES YES 7

Tunis (T) YES YES YES YES YES YES YES YES 8

Tetouan (M) YES YES YES YES YES YES 6

Casablanca (M) YES YES YES YES YES 5

Historic Cairo (E) YES YES YES YES YES YES YES 7

Kairouan (T) YES YES YES YES 4

Salé (M) YES YES YES YES YES 5

Sousse (T) YES YES YES YES YES YES 6

Sfax (T) YES YES YES 3

Sidon (L) YES YES YES 3

Tyre (L) YES YES YES 3

Tripoli (+Al Mina)

(L)

YES YES YES 3

Karak (J) YES YES YES 3

Baalbek (L) YES YES YES 3

Jerash (J)

YES YES YES 3


17 The urban centres in close proximity to major archaeological sites are given relatively good tourism ratings, such as the towns of Jerash, Tyre, Baalbek, and Karak. The strategies in these

towns has been to attract tourist visiting the archaeological sites also to visit the town centres and stay longer. However so far this strategy has had only very limited success.



The assessment of the sustainable tourism potential of the Medinas is used later in Section 4 as part of the

ranking criteria for the rehabilitation potential of the Medinas.

4.1.2 Avoided costs of new buildings and infrastructure

All historic city centres currently perform some functions. Depending on the specific centre these functions

may include retail trade, public administration, personal and professional services, residential

accommodation, tourism, etc. These functions need in any case to be accommodated, either in the existing

historic centre or elsewhere in the city. Taking all costs properly into account it is often financially,

economically and ecologically more efficient to refurbish historic city centres than to demolish and

redevelop them from scratch, or than allowing them to deteriorate up to a point that they can no longer

function.

For instance, Rypkema, a reputed historic preservation economist, points out that historic buildings

incorporate a large quantity of “embodied energy”. 18 The “embodied energy” equals the total expenditure

of energy in the creation of the building and its constituent materials. When an historic building is

demolished, the embodied energy is largely or even wholly thrown away. This may have a large impact on

energy use. Rypkema cites Australian research that calculated that the embodied energy of the existing

building stock in that country was equivalent to ten years of total energy consumption (not only of buildings,

but of all energy users in Australia).

The same argument also applies to purely financial costs. While modern buildings may be more functional

and therefore have lower annual operating costs, when all upfront costs of demolition and rebuilding are

taken into account, the total lifecycle costs of preservation and renovation is in many cases lower than new

building. If an historic city centre is allowed to deteriorate up to a point that it can no longer perform its

functions, these functions must be relocated to other places in the city (for instance the periphery), leading

to additional costs for both the former occupants of the historic centre and for the public sector (the city

government and other authorities responsible for city infrastructure). In a comprehensive assessment of the

social and financial return of investments in the preservation of historic centres all these (avoided) costs

should be taken into account.

4.1.3 Non-use value

People attach value to the preservation of historic sites, even if they do not live or work there, or have no

intention to visit them. They value the mere existence of these sites for various reasons: they consider them

to be part of their national or cultural identity (existence value); and/or they want to preserve the option of

visiting them in the future (optional value); and/or they want to preserve them for their descendants

(bequest value). Consequently, they are prepared to pay for the preservation of these sites even if they

derive no direct use value from them. It is interesting to point out that the holding of non-use preferences is

not restricted to wealthy individuals or nations. Recent research demonstrated that Vietnamese nationals

attach a substantial non-use value to the preservation of the My Son World Heritage site, which by far

exceeds the costs of the preservation project and the estimated value of visitor revenues. 19

4.1.4 Distribution of value

The analysis considered the distribution effects of potential Medina rehabilitation to different stakeholder

groups. Analysis of such distribution effects when conducted as part of a comprehensive cost-benefit

analysis would consider the distribution of both benefits and costs of rehabilitation to different

stakeholders. A more simplified approach has been followed where an estimation is made of where

18 Donovan Rypkema (2007), Sustainability, Smart Growth and Historic Preservation, presentation to conference of Save Our

Heritage Organization, San Diego. 19 Tran Huu Tuan and Stale Navrud, (2008), “Capturing the benefits of preserving cultural heritage”, in Journal of Cultural

Heritage, vol. 9, p. 326-337.



aggregate benefits fall for the different types of Medina rehabilitation types. The result of this analysis is

shown on Table 10:

Table 10 Distribution of Benefits from Types of Possible Interventions in Medinas

TYPES OF

REHABILTIATION

INTERVENTIONS

Distribution of Main Benefits

Deepens

heritage

value and

cultural

awareness

Attracts

tourists &

promotes

tourism

Generates or

increases

government

revenues

Attracts or

facilitates

private

investments

Benefits local

population

Encourages

more social

diversity

(1) Basic infrastructure

rehabilitation XXXX XXXX

(2) Monument repair and

renovation XXXX XXXX XXXX

(3) Public space

improvements & circuits XXXX

XXXX

(4) Housing/property

improvement schemes

XXXX XXXX XXXX

(5) Renovation and re-use of

historic structures XXXX XXXX XXXX

XXXX

(6) Improve commercial

spaces & opportunities XXXX XXXX

XXXX XXXX XXXX

(7) Local development & anti-

poverty schemes XXXX XXXX

(8) Support for traditional

handicrafts XXXX

(9) Social facilities and

community development XXXX XXXX

(10) Improved management

& capacity XXXX XXXX XXXX XXXX

(11) Legal and regulatory

reform XXXX XXXX

(12) Titling & property

market improvements XXXX XXXX

(13) Introduce eco-friendly

technology XXXX XXXX XXXX

The principal implication of this simplified distribution analysis is to underline that Medina rehabilitation can

have potential beneficial consequences for the range of principal stakeholders – including the general public

(via general heritage value), tourists, public finances, the private sector and local city and Medina residents.

4.2 Specific Issues Regarding the Business Case for Medinas and Capturing the Value of Medinas

The Pre-Operational Study found that the business case of Medinas and Medina rehabilitation is generally

not well understood or articulated within the countries and Medinas covered, with some exceptions. This

relates partly to communication and awareness-raising. However, there are also generic dimensions to the

business case of Medinas that present specific challenges to realizing the business case and capturing the

associated value.



4.2.1 Financial Return and Economic Return

In many Medina preservation projects the economic return is likely to be (substantially) larger than the

financial return. There are two main reasons for this being the case.

Non-use values can be large, and cannot be converted into financial revenues (except through general taxation of all residents of a city or country).

Historic city centre redevelopment projects have large external benefits that fall outside the range of the investor. For instance, suppose that a preservation project raises property values in the historic city centre. The investor can only capture the value gains of the properties in his own possession. The other property owners are free-riding on the investment of the investor.

This mismatch between financial and economic return calls for innovative solutions such as collaborative

development by all or most stakeholders (so that external effects are internalised) or special funding

mechanisms to capture benefits and convert them into financial streams that can be used to fund

investments (for instance tax increment financing). These considerations therefore feature in the design of

the Medinas 2030 Investment Programme, albeit that the weakness of underlying public financial

management systems in almost all of the Medinas limits the potential to apply many of the value-capture

financial instruments used in other countries for financing rehabilitation and urban area development.

4.2.2 Customization is Essential

The size and the nature of the (potential) economic value of an historic city centre strongly depend on

specific local conditions. For instance, the values deriving from authenticity can only be exploited if the level

of authenticity is sufficiently high. Not every historic city centre can (nor should) be developed as a major

touristic centre. Only city centres that are sufficiently distinctive (i.e. that contain major historic buildings

and/or intact historic quarters of a certain size) are eligible for such a function. The preservation of buildings

as an alternative to demolition and rebuilding is only possible if the historic buildings can be made

sufficiently functional for current requirements, and if they are not dilapidated up to a point where indeed

demolition and redevelopment from scratch is the only viable option.

It is therefore impossible to define a general business case for investments in the preservation of a Medina.

The contents and the return (both socio-economic and financial) of an investment programme will depend

on local circumstances and urban planning objectives. In some cases, preservation may not even be the best

development option.

Based on international experience, it is nevertheless possible to formulate a general conclusion and

recommendation with respect to investments in the preservation of historic city centres (such as Medinas).

The general conclusion is that there are many examples of successful investments in the preservation of historic districts and historic sites. Successful means in this context that the historic district has been rehabilitated, that historic buildings have been preserved and restored in good condition, and that the district and its buildings perform socially useful functions and are an essential part of the overall urban fabric.

The general recommendation is that the preservation project must be aimed at a balanced, harmonious and sustainable development of the historic centre, by implication an ‘integrated approach’. These are very general criteria, the operationalization of which again depends on local circumstances and policy objectives. Essentially, it means that the development plans should not lead to undesirable effects (congestion, environmental pollution, damage to the authenticity of the site, displacement of local population and economic activities, etc), or if there are some undesirable effects, that these are properly taken into account and remedied or mitigated (for instance by providing new accommodation for displaced inhabitants, adequate investments in complementary infrastructure, etc).



The above does not exclude preservation projects that are heavily weighted towards one function (for

instance tourism, retail, high-income residences), on the condition that these functions are the most suitable

for the valorisation of the distinctive characteristics of the historic centre, and that any displaced activities

receive adequate compensation.

Economic Dimensions and Multi-Stakeholder Revitalization

Historic Beyoǧlu, Istanbul*

Beyoğlu, one of the historical quarters of Istanbul, has seen a significant process of transformation and revitalization over the past two-and-a-half decades. Originally a suburban area attached to the ancient and historic city of Galata, Beyoglu developed into an international and cosmopolitan area between the 16th and the 18th century. It was a place where Europeans and other non-Turkish migrants settled around a number of diplomatic mission posts. In addition Beyoğlu harbored a lively center of commerce, trade and manufacturing due to its proximity to the waterfront and port areas along the coastlines of the famous Golden Horn bay. The area went through a particularly prosperous era during the heydays of the Ottoman Empire in the 18th century. The political and economic disintegration of the Ottoman empire in the course of the 19th century brought a decline of trade, commerce and diplomatic activities and led to a deterioration of the once lively and diverse urban functions of Beyoğlu. Later on, during the 1950s, rapid urban growth resulting from the advent of rural migrants further aggravated the challenges facing the city’s authorities. While low-income migrants joined its ranks in large numbers, its historic narrow street plan offered increasingly poor accessibility to aspiring lower and upper middle class families, and its small land parcels proofed insufficiently spacious for establishment of commercial activities that continued to grow in scale and footprint. This decline led to substantial decrease in real estate prices, high vacancy rates and wide-scale abandonment. The 1980s however saw a substantial turnaround of Beyoğlu being put into motion. Key factor was the establishment in 1985 of a non-profit Association for the Beautification and Preservation of Beyoğlu by local store-owners. This association convinced the city government to pedestrianize the main street between Taksim Square and Tunel Plaza near the Golden Horn, according to a plan prepared by the University of Istanbul. This paved the way for many concerted actions of public and private parties: construction of multi-storey car parks near the pedestrianized area, reintroduction of the tramway, organization of a competition for the beautification of facades and the transformation of buildings, installation of new custom designed decorative street lighting and street furniture and, in 2000, the opening of a subway line between Beyoğlu and the new Central Business District further north. The results of the revitalization efforts have been spectacular. They are visible in a substantial increase of the number of stores, restaurants, bars, art galleries, cultural facilities. Visitor numbers and real estate values have been multiplied. The area has become a hub for intellectuals, artists and young urban professionals, and occupancy rates have risen dramatically from their low pre-1980 levels. Gentrification, increased commercial activities and tourism, and rising property values may not be measures of success in all historic centre preservation projects, but they are in the case of Beyoğlu which is uniquely positioned to fulfil these functions and has fulfilled them in the past. The case of Beyoğlu confirms several success factors presented earlier in this Section, such has:

a sustainable development plan tailored to the distinctive characteristics of the location (historic cityscape with spectacular views on the waterfront with a tradition as a main street);

concerted private and public actions of the most important stakeholders (so that rehabilitation benefits are internalized)

public investments in public infrastructure matched by complementary private investments in the transformation and refurbishment of historic buildings.

* Vedia Dokmeci, Ufuk Altunbas and Burcin Yazgi (2007) “Revitalisation of the Main Street of a Distinguished Old Neighbourhood in Istanbul”, in

European Planning Studies Vol. 15, No. 1, and Evren Ozus and Vedia Dokmeci (2005), “Effects of Revitalization in Historical C ity Center of

Istanbul”, in International Real Estate Review Vol. 8 No. 1: pp. 144 – 159



4.3 Necessity to Capture the Economic Upside

In the previous Section, the qualitative economic upside of Medina rehabilitation was described. A key

question in the economic assessment of interventions is the likely development without the interventions. In

the case of Medinas, we have observed (see Pre-Operational Study Final Report – Volume II) that over the

last decades the deterioration of most Medinas has taken place rather consistently. The existing institutional

setups and socio-economic dynamics have not led to a trend reversion.

Although not necessarily identical for all countries involved, current priorities and developments in most of

the countries and cities concerned do not seem likely to realistically make a change in the trends affecting

the Medinas. Consequently, the further deterioration of the Medinas would make the generation of the

economic revenues described in the previous Section more difficult to realize. In case of an intervention

through the creation of a Medina Investment Programme, the chance of a trend reversion in the Medinas

should be expected to increase. The qualitative assessment of the size of the potential economic revenues of

such a trend reversal seems to justify a substantial investment.

The assessment conducted during the Pre-Operational Study has been based on the identification of

causalities, potential economic benefits and likely trend developments in Medinas with and without any

intervention. Such analysis can benefit from more profound economic assessment, yet meaningful

quantification of economic effects in heritage preservation and in the situation of the Medinas in particular is

difficult. Recommendations for the approach to be followed when formulating and assessing projects within

the Medinas 2030 Investment Programme are therefore made.

4.3.1 Approaches for Measuring the Economic Value of Rehabilitation and Preservation

While it is generally considered that the preservation of historic city centres creates economic value, the

measurement of this value is difficult. Economic evaluation studies have been conducted for numerous

historic preservation projects.20 On the basis of methodology, two groups of studies can be distinguished,

namely 1. economic impact studies, and 2. cost-benefit studies.

Economic Impact Studies

Economic impact studies measure the economic activities generated by the realisation of the preservation

project during its construction phase. It measures the impact of the expenditures associated with the

realisation of project on the regional economy (in most cases mainly the construction sector and suppliers to

the construction sector) in terms of employment and value added.

The method of the economic impact study has a number of serious shortcomings which make it a flawed

instrument for the assessment of preservation projects. First, it has a very narrow scope. It focuses on the

costs of the project, and not on its value. Secondly, in most cases no counterfactual analysis is made of the

economic impact of an investment of similar size (in terms of expenditures) in a development project not

related to historic preservation. Probably, this impact would have been about the same.

A well-executed economic impact study is very useful, however, to identify and quantify the economic

linkages between the historic city centre and the rest of the city or region. It can demonstrate how the

economic impact of the Medina is distributed across the surrounding region through input-output relations.

Cost-Benefit Studies

A social cost-benefit analysis (SCBA) attempts the identification and monetary valuation of all impacts of a

historic preservation project. A SCBA examines the costs as well as the benefits (values) of a project. In

20 See Mason (2005), op. cit. and Donovan Rypkema, Caroline Cheong and Randall Mason (2011), Measuring Economic Impacts

of Historic Preservation, A Report to the Advisory Council on Historic Preservation.



theory it is a very suitable instrument for the socio-economic assessment of an investment in the

preservation of an historic city centre. In practice, the conducting of a SCBA is hindered by many data

problems. Many benefits are not directly expressed in money terms (for instance social and cultural

benefits). Some are not even directly observable (for instance non-use values). Consequently, the benefits

must be inferred indirectly from observable data with the help of special methods that are adopted from the

theory and practice of the economic valuation of environmental effects (emissions, loss of biodiversity, etc.).

Examples of such methods are: shadow prices, hedonic regressions and contingent valuation. The

consequence is that cost-benefit analyses are difficult to carry out, and may nevertheless yield results with a

high margin of uncertainty. There is also a risk that the performers of a cost benefit analysis will only focus

on the costs and benefits that can be quantified and valued, and tend to ignore costs and benefits that are

difficult to analyse even if they are very relevant. So, while an SCBA is in principle comprehensive (unlike an

economic impact study), it may in practice turn out to have a skewed and restricted scope towards effects

for which enough data are available for a quantitative analysis

Especially the estimation of non-use benefits (often the most important benefit) is fraught with

methodological difficulties. For non-use values only contingent valuation methods are available. They

essentially involve surveys where people are asked about their willingness to pay for a certain good (in case

the preservation of an historic site). The questions need to be carefully framed and the surveys carefully

conducted in order to avoid deliberate misrepresentation by the respondents. Even if the survey results are

reliable, then there is the problem of extrapolating the survey sample to the entire population of non-users.

4.3.2 Recommended Approach for Economic Evaluation During Project Formulation and Assessment

For the formulation and assessment of projects during the implementation of the Medina 2030 Investment

Programme, the following recommendations for economic evaluation are given.

The assessments must be conducted at the project or the Medina level (programme of projects within a Medina). An assessment covering several or all Medinas is not meaningful given the large diversity of Medinas.

The scope and level of detail (and therefore cost) of the assessment must be tailored to the size of the investment that is envisaged. For very large investments a social cost benefit analysis can be carried out (but then sufficiently budgeted in order to allow a good quality approach and results). For most projects an eclectic approach is proposed. This approach may include the following criteria:

o sustainability of development goals; o realistic financial business case (i.e. covering financial costs and revenues), which may even show

an insufficient return as long as the funding of the viability gap is adequately addressed; o stakeholder support.

The exact criteria must be defined at the project level, taking into account the specific project objectives

(which will differ from Medina to Medina).

4.4 Potential Value-Added of a Medinas Investment Programme

The Pre-Operational Study concludes that there is a need for an Investment Programme in the Medinas that

focuses on preservation and re-use of Medinas rather than on new building. Many historic city centres and

Medinas contain unique features that are not found elsewhere in the city (nor anywhere else in many cases).

These unique features undoubtedly have an economic value, made explicit most often in the form of

tourism, although the economic value is often difficult to measure and also difficult to convert in financial

cash flows that can be used to fund investments. By demolishing the Medina, or by letting it fall it into ruin,

these unique features are lost. The functions (potentially) performed by the Medina, and that are based on

the unique features of the Medina, are lost with it. Depending on the specific Medina, these functions my

include cultural tourism, retail trade, creative industries and services, an authentic living environment, and

so on. By losing its Medina, the city loses a unique part of its social, cultural and economic fabric.



The complex economic characteristics of heritage preservation in general, and the specific situation of the

Medinas in particular where even basic data is mostly unavailable, makes the quantification of the value

added of the Medinas 2030 Investment Programme difficult, and in many conceptually meaningless. From a

qualitative perspective on causalities and general economic value, the Pre-Operational Study concludes that

a rationale for an Investment Programme in the rehabilitation and preservation of Medinas can be justified.

This is reinforced by considering that the existing ‘status quo’ trend will result in further deterioration of the

Medinas. A rationale exists therefore for an Investment Programme that can flexibly intervene to allow the

economic upsides of Medina rehabilitation to be realised by catalysing a ‘trend reversal’.

There is no general recipe for the preservation and revitalization of a Medina. The optimal valorisation of a

Medina heavily depends on local circumstances and policy objectives. Medinas with very authentic buildings

and districts are eligible for the development of cultural tourism. Other are better suited for retail, craft

shops or creative industries. Some may have already lost so much of their distinctive character that

preservation is no longer a viable option. The Medinas 2030 Investment Programme must therefore be very

flexible, both with respect to the type of projects as with respect to the stakeholders involved.



5 Proposed Investment Programme for the Medina 2030 Initiative

The analysis indicates that there exists a rationale and value-added of investment in the rehabilitation of

Medinas. The rehabilitation and preservation of these historic districts represents unique added value to the

cities and countries concerned, as well as to wider European and international preservation interests. The

study shows that Medinas are by their nature rather complex parts of the city environment, involving

multiple stakeholders, multiple sectors and complex political, administrative, socio-economic and

development relationships in defined city localities. The study has also shown that while there are

commonalities to the Medinas and the challenges of their rehabilitation and preservation, there are also

significant differences between the country contexts and between the Medinas themselves. This underlines

that a programme to support Medina rehabilitation must incorporate flexibility and responsiveness to

national and local difference, while promoting and reinforcing sustainable practices for Medina

rehabilitation and preservation.

In this context, a proposed investment programme for the Medina 2030 initiative has been developed. This

proposed investment programme considers carefully the realities of Medinas and their country contexts and

the interests of the European, national and local sponsors who are concerned for their sustainable

rehabilitation and preservation. The proposed investment programme is outlined in four parts:

Taking into account the findings of the study, a Strategic Approach and Guiding Principles for the

proposed investment programme are outlined. These translate how a sustainable intervention can be

structured in the context of relatively diverse underlying Medina and national contexts.

The proposed Investment Components of the investment programme are then outlined. These

comprise instruments both to allow for relatively quick and discrete interventions to be undertaken,

while also addressing the more systemic management and financing of Medinas over the longer term.

A significant consideration for the sponsors of the Medina 2030 initiative concerns whether and how

best to establish an effective and sustainable intervention capacity to further take forward support of

Medina rehabilitation and the articulation of future investment operations in Medinas across the

southern and eastern Mediterranean region. A Medina 2030 Facility is outlined as the recommended

approach for creating sustained support and implementation of the Investment Programme across the

region going forward.

5.1 Strategic Approach and Guiding Principles

The strategic approach followed with the investment programme needs to take into consideration the

specific situation of the countries and Medinas concerned, and also draw from the experience of European

partners in shaping appropriate investment initiatives for rehabilitation and development. Medinas are

complex areas and interventions to support their sustainable rehabilitation and preservation accordingly

require subtlety and sensitivity. There is also a risk that investments in Medina rehabilitation become ‘once-

off’ interventions, and care is needed in the investment programme to consider the on-going and longer

term management of the Medinas in a sustainable fashion. Finally, the study conclusively shows that further

investment in technical support is required for Medinas to better articulate their investment needs for

rehabilitation projects and to better organise for their sustained management of the Medina. This further

investment in both projects and further support to the Medinas appears to be value-adding and justified.

5.1.1 Strategic Approach

A key consideration for the strategy of the Investment Programme is the diverse nature and likely future of

the institutional setup of Medinas. Given the current relatively limited institutional framework, the



programme needs to address the need to rehabilitate Medinas both in the scenario of improving

institutional settings and in the scenario of the institutional framework remaining limited. In other words,

the programme should be able to focus its interventions both on relevant implementing authorities, and on

Medinas in which no relevant implementing authority may be identified.

In this context, the core strategic approach for the investment programme comprises two interlinked

dimensions:

First, through investment activities supporting the establishment of a sustainable, predominantly public institutional frameworks for the management of and further investment in Medina rehabilitation and preservation (achieve a desired framework).

Second, to be responsive to potential delays in the establishment of public institutional frameworks, through investment to support a diverse range of potential local initiatives to rehabilitate and preserve Medinas (act in a real framework).

5.1.2 Guiding Principles

Taking the study findings and the realities of the countries and their Medinas into account, the investment

programme is guided by six principles, as articulated below:

1. Communication, Awareness-Raising and Knowledge Sharing 2. Flexibility and Tailored Solutions 3. Promoting Bottom-Up Solutions and Rewarding Responsiveness 4. Blending of Finances 5. Bundling of Projects 6. Leverage of Impact and Demonstration Effects

Guiding Principle 1. Communication, Awareness-Raising and Knowledge Sharing

The study found that there is generally a lack of awareness of the importance of Medina rehabilitation and

preservation, and in particular limited awareness of the value-added and the business case for investment in

Medinas. This is seen in low prioritisation of Medinas nationally, and limited strategic focus on Medina

rehabilitation locally. Two issues are relevant:

a. The importance of raising awareness of the value-added of Medinas, inter alia based on

European experience with cultural herniate preservation and historic city rehabilitation

b. The need for sharing of knowledge and experience in how to practically realise the business-case of Medinas, both between Europe and its southern and eastern Mediterranean partners as well as within the region

Guiding Principle 2. Flexibility and Tailored Solutions

There does not appear to be a ‘single-model’ for Medinas rehabilitation. Conditions in countries and the

Medinas themselves vary. Some countries (such as Morocco) have a significant number of Medinas and

appear ready for establishing a national level Medina investment programme. In other countries there are

fewer Medinas and less relevance (and local appetite) for a nationally organised programme. Similarly, some

Medinas already have developed rehabilitation plans and project investments, while others are very weakly

organised or not prepared at all. There are also fundamental legal, institutional and administrative

differences between countries, such as between those where local authorities are authorised to borrow and

those where this is prohibited.



The investment programme therefore needs to be able to flexibly respond to these circumstances and

provide both investment and technical assistance according to what is required.

Guiding Principle 3. Promoting Bottom-up Solutions and Rewarding Responsiveness

While there is an important role for more top-down external investment in and support for Medina

rehabilitation, it is clear that local solutions and stakeholders are central to sustained rehabilitation and

preservation efforts. It is also clear that in some cases local Medinas are already actively engaging in and

concerned about their rehabilitation, while in other cases almost nothing is being done locally.

As such, the investment programme should encourage and promote bottom-up rehabilitation solutions

shaped by local (and national) Medina stakeholders themselves, and to reward responsiveness shown

nationally and locally to Medina rehabilitation. This implies investing in countries and Medinas which

demonstrate the interest and motivation to actively engage in the rehabilitation and preservation of

Medinas.

Guiding Principle 4. Blending of Finances

The study found that Medina rehabilitation involves largely projects which will realize economic value that

will be achieved widely by society over time but which have weak financial characteristics in the immediate

sense. Most rehabilitation interventions and projects are of a public interest nature with limited direct

commercial returns.

At the same time, national and local public resources are constrained to make these investments, due to

weak underlying public revenue systems, competing budget priorities, and sovereign debt limits. This

situation of potential economic and developmental impact from investment, combined with limited public

resources, is precisely where Europe has made significant strides in blending approaches.

Blending uses grant funding to leverage additional flows (such as loans or risk capital) that enable projects to

be undertaken and on a more sustainable basis. Additional flows can include: beneficiary resources, other

donors, European and International development finance institutions, private supporters, commercial

finance and equity investment. Two levels of blending are appropriate for the investment programme:

a. Blending technical assistance with project investments

b. At the project level blending grant funding with additional flows (e.g. debt)

Guiding Principle 5. Bundling of Projects

The individual, discrete projects involved in the rehabilitation of Medinas are mainly of a small investment

size. With few exceptions, each of these projects alone is of too small to offset transaction costs and as a

viable investment prospect. However, there is considerable potential to bundle a number of small projects

together to create investment scale. Such investment in multiple smaller projects can be further facilitated

by using involving intermediary agencies, such as domestic national or local governments, or local

commercial banks. Existing operations such as global loans (private intermediary banks) and framework

loans (sovereign intermediaries) are relevant in this regard. With respect to Medina investment there are

three relevant dimensions to project bundling:

a. Bundling multiple small projects into packages covered by framework or global loan operations

b. Bundling Medina rehabilitation projects into wider sectoral or citywide programmes

c. Creating integration by bundling different project types (e.g. infrastructure, social, commercial)

into packages



Guiding Principle 6. Leverage of Impact and Demonstration Effects

There are many stakeholders and sponsors in the cultural heritage and inner city rehabilitation

environment, including governments, donors, public bodies, development agencies, financiers, experts,

private firms and wider civil society. Many initiatives to address Medina rehabilitation have been direct

interventions of specific sponsors, and in some cases these have been coordinated between sponsors.

Overall, the sustained impact made by sponsors and stakeholders can be increased through greater

leveraging of each other’s efforts.

The rehabilitation of Medinas can be significantly furthered through inspirational examples of how Medina

rehabilitation and sustained management can be achieved in practice. While European countries have

important examples and cases to share, it is vital for robust cases and approaches to be demonstrated

within the region itself. Such local demonstration effects can effectively raise awareness, illustrate the

added-value of Medinas, show how the Medina business-case can be realised, and provide examples of

technical and financing approaches. There is considerable potential to build further momentum for Medinas

rehabilitation in the region around such demonstration effects.

5.1.3 Programme Scope and Coverage

There are two interrelated considerations to the proposed scope and coverage of the Medinas 2030

investment programme, namely the definition of the ‘Medina’ to be included in the programme, and the

country and regional scope.

Regarding the definition of Medinas, as pointed out in Section 2.1 above, of the 17 Medinas covered in the

Pre-Operational Study, it is possible to define three types:

1. ‘classic Medinas’ 2. ‘historic city centres,’ 3. ‘core of small archaeological towns’

These are quite different from each other in nature and in heritage value. For example, the classic Medina

contains the greatest number of historical monuments and buildings of architectural merit, it is well defined,

and its urban fabric tends to represent a unified medieval whole. Historic city centres may also contain a

significant number of historical buildings and at least vestiges of a traditional urban fabric, but they are less

distinct and usually have a large number of modern structures. The core of small archaeological towns may

retain some traditional (at least early 20th century) historical character, but their heritage value is very

limited and they are very small in geographical terms.

In terms of scope, the Pre-Operational Study covered a selection of 17 Medinas and historic city centres in

five countries in the region. As outlined in Section 2.1 above, this only covers a portion of the region’s

Medinas, and there are numerous other Medinas in the five countries (especially in Morocco), and in addition

there are other neighbouring countries with very significant Medinas.

Defining an optimal scope for the investment programme requires a balancing between the physical and

functional commonalities of the areas concerned, the extent of specialization of the interventions required,

and the potential programme scale to justify investment. A balance is also required between focusing on

the wider urban centres in which Medinas are located, and the specific requirements of Medinas and

associated interventions. This is an issue of ensuring that the focus on the Medina is not lost within wider

urban issues. After all, the investments to date in the Medinas 2030 initiative since 2008 have created a

brand identity around the term ‘Medina’ as a mobilising context for rehabilitation and preservation of

Medinas and similar historic inner cities in the region.



Regarding the scope and coverage of the Investment Programme it is recommended to:

maintain the ‘Medina’ brand to build on the momentum created behind Medinas 2030

ensure a Medina programme is contextualised within wider urban initiatives but that the core specialization, focus, and distinction are retained

slowly expand the programme incrementally in terms of Medinas, concentrating first on the ten classic Medinas found in Morocco, Tunisia and Egypt, then on other Medinas within these countries (especially in Morocco)

slowly expand the programme incrementally in terms of countries, giving first priority to Morocco, then Tunisia, then Egypt, and lastly Lebanon and Jordan. Other countries with important classic Medinas – such as Libya, Algeria and Palestine – should be subject to small exploratory efforts to assess their interest (demand) and the value-added of including their Medinas into the Programme.

design considerable flexibility and periodic assessment into the Medina Programme. This is unavoidable, since all possible investment projects will be demand driven, and it is not possible to predict project identification and selections outcomes

following from the above point, the timetable of the programme must include “decision points” in which the critical paths of programme expansion, in terms of projects, Medinas, and countries, are carefully assessed.

This country by country, incremental, and self-adjusting approach is developed further in the Roadmap

Section for the Investment Programme as a whole and as elaborated in the individual country strategic

guidelines. In brief, it is proposed to focus initially on Morocco and Tunisia, as well as Egypt, and thereafter

on Jordan and Lebanon and other countries showing initiative regarding Medina rehabilitation.

5.1.4 Rehabilitation potential of Medinas included in the Pre-Operational Study

A preliminary exercise has been carried out to evaluate the 17 Medinas included in the Pre-operational Study

in terms of their potential for rehabilitation under the proposed Medinas 2030 Investment Programme. This

evaluation gives some guidance for determining the priority of certain Medinas and countries over others.

This evaluation informs the Road Map (Section 5), and also establishes an evaluation framework for more

precise evaluations to be carried out at later stages of the Investment Programme.

Evaluation criteria were developed by the Consultant team based on strategic rehabilitation considerations

and supported by missions to each Medina and on documentary review. (For details on each Medina, see the

individual country reports in Volume 2.) There are seven criteria used for evaluating Medinas:

Figure 4 'Nesting' of Medinas within the Urban Sector



(1) Monumental heritage value

The intrinsic heritage value is reflected in the total of monumental historic elements (religious

structures and establishments, defensive structures, caravanserai/oukalas, souqs/bazaars,

outstanding domestic buildings, etc.), both elements that are outstanding in architectural terms and

those that represent important historical events and periods.

(2) Heritage value of the urban fabric and built environment

The degree to which the Medina and its parts retain a unified medieval Medina character in terms of

street and public space patterns, in terms of the prevalent building stock, and in terms of

streetscapes and their heritage value.

(3) Existence of clear public strategies for rehabilitation

The degree to which local/national authorities have already elaborated and adopted integrated

rehabilitation strategies, plans, and investment programmes for a Medina.

(4) Existence of public properties with development potential

The existence of land and/or structures owned by public authorities (mainly municipalities) with

potential for development that could add significant value to the Medina, whether for public use or

profitable investment.

(5) Degree of revenue generation associated with rehabilitation efforts21

The extent to which there are possibilities for public or private investments that could generate

revenue streams and thus might make integrated rehabilitation at least partly bankable. (To a large

extent this criterion is linked to a Medina’s tourism potential).

(6) Tourism potential

The potential to attract and accommodate both international and local tourists to a medina, based

on the assessment of tourism potential conducted (see Section xxx).

(7) Effective support of public partners and clear promoter (mâitre d’ouvrage)

The extent to which a Medina’s rehabilitation enjoys good support from local/national authorities

and for which rehabilitation projects would have a clear promoter or mâitre d’ouvrage, especially for

integrated Medina rehabilitation.

Numerical values were assigned to each Medina for each criterion, allowing for summing across criteria and

allowing for an overall ranking of Medinas in terms of rehabilitation potential and priority to be developed.

The scoring approach and criteria are explained in Table 11.

Table 11 Scoring System for Assessment of Rehabilitation Potential

21 Another possible criterion could be the degree of economic benefit from investments (as measured by benefits to the local

population, to businesses, and to property values. However, such a criterion requires a large amount of information on economic

values, costs, and returns for each medina that was not possible to collect within the scope of the Pre-operational Study. It

should be kept in mind that economic benefit could be included in future iterations of medina evaluations, particularly

calculations of economic benefits of investments in public spaces and tourist circuits.

CRITERIA OF

REHABILITATION

POTENTIAL

Score

0 1 2 3 4

1 Monumental

Heritage Value

No significant

monuments

Monuments

limited to

fortifications

Fortifications and

grand mosque

Fortifications,

major mosques,

and rich historical

representation

UNESCO world

heritage site

listing



The results of the Medina ranking exercise show that Essouaira ranks the highest in rehabilitation potential

according to the six selection criteria. Also, of the top five Medinas, a total of four are found in Morocco. Of

the top ten Medinas, all five Moroccan Medinas appear as do all four Tunisian Medinas, and finally Historic

Cairo. Neither Lebanon nor Jordan have Medinas (rather historic city centres or archaeological towns) within

the top ten. These results inform the proposed Medina 2030 Investment Programme country focus as set

out in the Road Map. Finally, it should be noted that of the 17 Medinas, the top ten are all what are classified

as “classic Medinas.”

Table 12 First Round Prioritisation of Medinas by Rehabilitation Potential

MEDINA

1 2 3 4 5 6 7

Total Monumental

heritage value

Urban

heritage value

Existing

strategy &

plans

Public

property

opportunities

Potential for

revenue

generation

Tourism

Potential

Public partner

support

Essouaira (M)

4 3 3 4 4 4 3 25

Meknes (M)

4 4 3 2 3 3 3 22

Tunis (T)

4 4 2 3 3 4 2 22

2 Urban fabric &

streetscape

heritage value

No medieval

fabric or heritage

streetscapes

Partial medieval

fabric but little

heritage

streetscapes

Partial medieval

fabric and some

heritage

streetscapes

Near complete

medieval fabric

and significant

heritage

streetscapes

Unity of entire

medina in terms

of urban fabric &

heritage

streetscape

3 Clear strategies

& plans for

rehabilitation

No strategy, no

investment

projects, no

action plans, no

budget, and no

priorities

List of

investment

projects but no

clear budget or

strategy

List of investment

projects and

unifying strategy

but no clear

budget

A clear strategy

with investment

components and

budget

A clear integrated

strategy with

investments,

action plans,

priorities and

budget

4 Public assets

with potential

No land or

buildings with

development

potential

A limited number

of buildings with

some reuse

potential

Some buildings

and

markets/public

spaces with reuse

potential

Buildings with

reuse potential

and limited

vacant land in or

nearby medina

Buildings with

reuse potential

and extensive

vacant land in or

nearby medina

5 Degree of

financial return

All potential

investments

“fonds perdus”

All public

investments

“fonds perdus”

but some private

sector potential

Some public

investments

generate partial

cost recovery &

private sector

potential

Considerable

return on public

investments and

considerable

private sector

potential

Full cost recovery

of all public

investments and

considerable

private sector

potential

6 Tourism

potential

Score 0-1 from

assessment of

tourism potential

(Table 9)

Score 2-3 from

assessment of

tourism potential

(Table 9)

Score 4-5 from

assessment of

tourism potential

(Table 9)

Score 6-7 from

assessment of

tourism potential

(Table 9)

Score 8-9 from

assessment of

tourism potential

(Table 9)

7 Clear partner /

promoter for

rehabilitation

No clear partners

or promoter at

any level

Local authorities

ready to partner

Local and

national

authorities ready

to partner

Local and

national

authorities ready

and agree on

integrated

strategy

All authorities

ready and agree

on integrated

strategy and

budgeting



MEDINA

1 2 3 4 5 6 7

Total Monumental

heritage value

Urban

heritage value

Existing

strategy &

plans

Public

property

opportunities

Potential for

revenue

generation

Tourism

Potential

Public partner

support

Tetouan (M)

4 4 3 4 3 3 3 24

Casablanca

(M)

1 3 2 3 3 2 2 16

Historic Cairo

(E)

4 3 1 1 2 3 2 16

Kairouan (T)

4 4 2 2 2 2 2 18

Salé (M)

3 4 1 4 3 2 2 19

Sousse (T)

4 4 1 2 3 3 2 19

Sfax (T)

2 2 1 2 1 1 1 10

Sidon (L)

2 2 1 2 2 1 2 12

Tyre (L)

2 2 1 2 2 1 2 12

Tripoli (+Al

Mina) (L)

3 2 1 2 2 1 2 13

Karak (J)

2 1 1 1 1 1 2 9

Baalbek (L)

1 1 0 1 1 1 1 6

Jerash (J)

1 0 0 1 0 1 1 4


This ranking approach for assessing the rehabilitation potential of Medinas assumes that investment

decisions are conceived externally. The Pre-Operational Study has identified that the central involvement of

national and local Medina stakeholders is critical for successful rehabilitation interventions and investments.

As such, the Medinas 2030 Investment Programme should be largely demand-driven with stakeholders in

the Medinas and countries themselves being the main identifiers of investment projects, with support

provided for elaboration. The Investment Programme can assist them (for example with preparatory

technical assistance and in mobilizing financing), but the various stakeholders are meant to be the main

drivers of the rehabilitation projects. Therefore although a particular Medina may not rank highly, the

stakeholders of the Medina may be pro-active in embracing rehabilitation and should be supported by the

Investment Programme.

5.1.5 Medina Projects in the Pipeline

The Consultants conducted visits to the five countries and almost all of the 17 target Medinas and historic

city centres22 and based on discussions with officials and professionals both at the national and Medina

levels and a documentary review, it was possible to develop a preliminary project data base of interventions

and investments that might become candidates for inclusion in the eventual Medinas 2030 Investment

Programme. A total of 63 potential rehabilitation projects were identified by the initial screening (see Annex

22 Due to security concerns in Lebanon it was not possible to visit Baalbek and Tripoli (including al-Mina). However it was possible

to meet with the municipal officials for Tripoli and al-Mina.



2). This comprises 20 possible projects for the five Medinas of Morocco that were covered, 13 for the four

Medinas of Tunisia, 8 for Historic Cairo, 18 for the five cities of Lebanon covered, and 4 for the two cities of

Jordan covered. The project pipeline identified is summarised in Annex 2 of this report, and the projects are

described in detail in Pre-Operational Study Final Report – Volume II.

The project identification and analysis indicated that rehabilitation plans and schemes vary considerably in

terms of scale, detail and emphasis. With few exceptions, neither municipal, regional or national agencies

were ready with details of projects proposed.23 A few projects that were identified included details of

investment costs, and most had not addressed the question of finance coherently other than to assume that

funds would be provided through standard government budget lines or that private capital would somehow

be attracted.

It is notable that of the 63 identified projects, most were as yet weakly formulated with little documentation

in place. It was anticipated to find more developed projects and project information already available for

potential rehabilitation funders, and that fund-raising and even lobbying would be a more well-developed

skill. The weak institutional frameworks and limited project formulation underlines the fact that developing

a portfolio of bankable Medina rehabilitation projects will require pre-investment, and that most of the

existing institutions in each country that support rehabilitation do not currently have sophisticated project

identification, elaboration and promotion capabilities. Similarly, for situations where rehabilitation projects

are more developed, the dominant focus is on grant financing. Innovative ideas and approaches for

financing for rehabilitation projects were not frequently, while they could be a valuable alternative or

supplement for the grant financing focus.

5.2 Proposed Investment Programme Components

Based on the strategic approach and guiding principles, four main components of the Investment

Programme are proposed together with relevant financial instruments. These components and their

instruments allow for flexible and tailored interventions in different Medinas and countries based on specific

local conditions and responsiveness. The four investment components are:

1. Immediate Medina Project Investments Using Existing Operations (Relatively Quick Wins)

2. Creation of Basic Systems for Sustained Management and Financing of Medinas (Short Term Sowing)

3. Rehabilitation Programmes Requiring Strong Institutional Frameworks (Longer Term Wins)

4. Alternative “Bottom up” Financing Mechanisms and Structures for Medina Rehabilitation

(Redundancy)

The four components should maximize the chance of impact on the preservation of the Medinas.

Strategically, if well-functioning (public) institutional arrangements were in place in the countries and

Medinas concerned, the Investment Programme would require only components 1 and 3 – meaning that

significant individual and national-level investments in sustainable Medina rehabilitation could be arranged

relatively easily using principally existing products. Given that in most countries and Medinas such

institutional arrangements are not yet adequately in place, component 2 is required to embark on

institutional framework building in the shorter run. Finally, component 4 provides a suite of alternative

financing mechanisms and structures which allow for Medina rehabilitation to be undertaken even where

adequate institutional arrangements are not (yet) in place. These financing mechanisms and structures place

emphasis on mobilising and supporting private and civil society actors to play a central role in rehabilitation.

They are also relevant where general limits on public sector debt prevent public borrowing for Medina

rehabilitation.

23 Only in Essaouira and Meknès and Tunis (complements of ASM-Tunis) were such documents provided.



The four investment components and their related operations are each outlined below. Thereafter, the

institutional arrangements to further implement the Medinas 2030 Investment Programme and the related

investment instruments are proposed.

5.2.1 Immediate Medina Project Investments Using Existing Products (Relatively Quick Wins)

The first investment instrument concerns investing using EIB and other IFI products in rehabilitation projects

in Medinas that are already existing or are at a relatively mature stage of formulation. This will allow for

more rapid project investment to take place (quick wins, or more precisely, relatively quick wins) which offer

a potential demonstration effect. The demonstration effect is twofold:

Demonstrating the intention and ability of the Medina investment programme to fund and finance rehabilitation projects, thereby creating an incentive ‘pull’ for other countries and Medinas to actively identify and formulate projects for potential investment

Demonstrating how various different projects can be undertaken so as to benefit Medina rehabilitation, as well as to demonstrate blending and bundling of projects for Medinas

During the Pre-Operational Study an initial project identification was undertaken to identify any existing,

potentially mature projects in the 17 Medinas included in the study that are ready for investment. The

potential to invest in such projects using existing financing products was assessed. It is emphasised that this

initial project identification was conducted primarily through field missions within the resource scope of the

Pre-Operational Study, and hence is not an exhaustive list. The projects initially identified are outlined in

Annex 1 and in detail in Volume II Medinas 2030 Country Reports.

Four main observations emerged from the project identification:

With some exceptions, there are few projects already in a mature stage of readiness in the Medinas covered in the study

While few projects are already at a mature preparation stage, there are many potential projects in the Medinas. With further investigation into Medinas it is apparent that a more significant number of rehabilitation projects would be formulated

The majority of rehabilitation projects in Medinas are of a relatively small investment size, and many are public domain projects that do not have immediate commercial characteristics. It was also noted that most of the larger infrastructure (e.g. transport, water, waste, energy, etc.) that is relevant for Medinas are scaled at the city (or wider) level and not at the level of the Medina

The main EIB project investment products (investment loans) are too large to easily invest in the mainly small investment-sized projects in Medinas. Other EIB products such as framework loans and global loans can be more relevant. The need for blending and bundling of project investment was strongly noted

Notwithstanding these conclusions, it is possible to identify two areas where, with moderate technical

support in project formulation, it is feasible for investment to be made in existing Medina projects using

existing products, namely: Discrete commercial project investments in Medinas, and infrastructure and

public domain projects within specific Medinas.

a) Discrete Commercial Project Investments in Medinas

A number of primarily commercial projects were identified that may be eligible for project investment loans.

The invest size of these projects is below the usual size for EIB project investment loans. As part of the

formal formulation of these projects, attention should be given to potentially expanding the project scale,

combining several projects to be undertaken by a single commercial borrower, and/or financing these



projects via existing local partner banks. Specific commercial projects identified during the Pre-Operational

Study are outlined where found in the relevant country strategy and guidelines in the Roadmap Section.

Table 13 Initial Identification of Small, Discrete Rehabilitation Projects at Relatively Mature Preparation Stage

Number Country Medina Project

T-11 Tunisia Sousse Loukala ( galerie, cafe, theatre, cultural centre, restaurant) in old

renovated oukala. Euro 160,000 invested, completion loan/grant needed

T-12 Tunisia Sousse Atelier El Hajj revitalisation (last traditional weaver in Sousse);Euro

20,000 already invested

T-13 Tunisia Sousse Museum El Kobba (interwar period) and old coffee house; Euro 300,000

already invested

E-1 Egypt Historic Cairo Darb al Labbanah mixed use area development with three small hotels,

adaptive reuse, etc.

J-1 Jordan Karak Private hotel in Karak

b) Infrastructure and Public Domain Projects Within Specific Medinas

Some Medinas were found to have a number of potential projects that could be bundled into a larger

investment package to be undertaken by the local government concerned. It is feasible to formulate these

further as part of a single sovereign framework loan which would fund multiple smaller projects within the

Medina.

Specific infrastructure and public domain projects identified during the Pre-Operational Study are outlined

where found in the relevant country strategy and guidelines in Section 5.5. There is potential also to package

such projects at the national level, as is considered under the second investment Instrument (Replication of

National Medina Support Programmes).

Table 14 Initial Identification of Infrastructure and Public Domain Projects at Relatively Mature Preparation Stage

Number Country Medina Project

M-1 Morocco Salé Relocation of 900 households and rehabilitation of 260 houses and purchase of

commercial properties (fonduks) by Commune

M-2 Morocco Salé Restoration of the medina walls and establishment of new museums

M-3 Morocco Salé Preparation of guidebook and signage

T-1 Tunisia Tunis Rehabilitation and enhancement of a complementary tourist circuit from the

Zitouna to Sidi Ibrahim 1600 meters

T-5 Tunisia Kairouan Relocate the museum of Islamic Art from Bourgiba Palace to public land near the

Great Mosque

T-6 Tunisia Kairouan Renovation of an old hotel and surrounding central souks

T-8 Tunisia Sousse Improve wastewater effluent system, reduce contamination

T-9 Tunisia Sousse Completion of renovation of caravanserai and souk des forgerons

T-10 Tunisia Sousse Renovation of the Place de la Bourse

E-2 Egypt Historic Cairo Bab al Azab (Citadel) redevelopment -- Creation of new entrance to Citadel

complex, monument conservation, exhibition space, handicraft outlets



E-5 Egypt Historic Cairo Public space and tourist circuit improvements from Islamic Museum by Bab al

Zuwayla to Azhar Park plus adaptive reuse of tent makers souk

E-6 Egypt Historic Cairo Public space and tourist circuit improvements on Bab al-Wazir St. street leading

to the Citadel

J-2 Jordan Karak Parking schemes outside old town and shuttle buses

L-1 Lebanon Tripoli Streetscape and public space improvements in central and southern souks

L-2 Lebanon Tripoli Urban Upgrading of Tabbane Area

L-3 Lebanon Al Mina Redesign and improvement of the seafront and corniche

L-4 Lebanon Al Mina Rehabilitation and reuse of the historic seafront city saray

L-5 Lebanon Al Mina Improvement of the old souk (bazaar)

L-6 Lebanon Sidon Shara al Shakri and related street improvements

L-7 Lebanon Sidon Traffic and parking improvements

L-10 Lebanon Tyre Relocation of government offices and rehabilitation of the city Saray

L-12 Lebanon Tyre Peripheral parking and shuttle buses

L-14 Lebanon Tyre Historic building façade treatment

L-15 Lebanon Baalbek Old souk (bazaar) rehabilitation

L-16 Lebanon Baalbek Ras al Ain Boulevard rehabilitation

L-17 Lebanon Baalbek Gouraud Barracks rehabilitation and reuse

L-18 Lebanon Baalbek Rehabilitation and reuse of old mud structures

As noted, these projects will require some further technical support in formal project formulation. In almost

all cases, it will be necessary to look at blended funding arrangements (e.g. combining technical assistance

and project financing and/or combining grant support and loans) at the project level. In order to avoid

misunderstanding, the “relatively quick win” projects will require additional preparatory work. We do not

anticipate any of the projects to be ready to go immediately. The additional support will in any case consist

of TA work (project preparation), and in some cases identification and attraction of grant moneys.

5.2.2 Creation of Basic Systems for Sustained Management and Financing of Medinas (Short Term Sowing)

A major conclusion of the Pre-Operational Study is that the governance framework for the management

and financing of Medinas is weak, and that without the presence of a basic institutional setting the

rehabilitation and preservation of Medinas will not be sustainable. While discrete project interventions in

Medinas are important, it is clear that putting in place more effective systems through which Medinas are

governed, managed and financed is as important for long term effectiveness. In fact, implementing a

classical structural rehabilitation program (listed as third component of the envisaged program) would not

be sufficiently effective in case of the absence of an appropriate institutional framework. The second set of

investment instruments for the Medinas Investment Programme therefore concern investments in creating

and strengthening the framework and structures through which Medinas are governed, managed and

financed.

Several considerations are important. First, the diversity of country and city contexts for Medinas suggests

that there is no-single model that can be implemented in the same way in all countries and Medinas. A

flexible approach is needed to support systemic improvements that are appropriate for each country and

Medina context. Second, the framework for Medina management has both national and local dimensions,

however the extent of centralization/decentralization differs between countries. Many local issues

concerned with Medina management (e.g. local government taxing powers, property ownership and

expropriation) involve national legislation. Third, structural strengthening requires primarily technical

assistance. However, it is optimal if such technical assistance is combined where possible with investment

projects.



A wide range of challenges regarding the structural systems for Medinas management and financing were

identified in the countries and Medinas covered in the Pre-Operational Study. Significantly, in almost all

cases the basic question of “Who is responsible for the Medina?” cannot easily or clearly be answered.

Analysis of this situation, taking country/Medina diversity into consideration and the need for flexible and

tailored approaches, results in identification of xx priority areas for required systemic support:

Potential National Level Actions

Improvement, if appropriate, of the national policy framework affecting Medinas - Review and possible amendment of existing policies / laws impacting positively (e.g. heritage

promotion) or negatively (e.g. rent controls) on Medinas, including planning policies / laws - Assessment and possible amendment of existing conservation or heritage policies / laws for

purposes of Medina rehabilitation and management - Assessment of potential of a specific policy / law relating to Medina rehabilitation and

management - Assessment and improvement if necessary of how the management of Medinas is addressed in

national policies / laws for local government administration

Clarification of national responsibility/ies, if appropriate, for Medinas rehabilitation and management - Clarification of existing responsibility/ies in national ministries or agencies for matters related to

Medinas - Identification if relevant of national champion for Medinas – potentially a national ministry,

national agency, representative association (e.g. local government association or Medinas association)

- Establishment if appropriate of institutional capacity at national level to represent the interests of Medinas and/or to support Medinas at local level

Development of national financing instruments - Clarification and improvement if appropriate of existing financial flows (types and volumes) from

national fiscus for Medinas rehabilitation - Establishment if appropriate of specific funding mechanisms for Medinas rehabilitation and

management

Potential Local Level Actions

Local awareness-raising, communication and capacity building

Establishing appropriate institutional arrangements for Medina management - Designing an appropriate institutional arrangement for the management of the Medina,

potentially: o a Medina manager within the local government o a Medina Unit or Department within the local government o a local Medina management agency, potentially with multiple stakeholder involvement o a Medina stakeholder forum o a PPP management arrangement o other

- Determining responsibilities, capacity required, funding for the institutional arrangement - Developing technical capacity of the local government and other relevant stakeholders involved in

Medina management

Implementing appropriate and participatory plans - Assessment of the role and inclusion of the Medina within the wider city planning - Undertaking a planning process that involves key Medina stakeholders in a locally-appropriate

fashion - Preparation of a development plan for the Medina that establishes a vision for the future

development of the area, key planned projects and developments, as well as development controls - Determination of the mechanisms through which the plan will be implemented



Strengthening financial arrangements - Clarification of national fiscal allocations and transfers - Determination of the manner in which the Medina and the related rehabilitation projects can be

included in the local government budget, including possible ring-fencing of funds - Determination of how property taxation can be introduced or strengthened in the Medina - Strengthening of appropriate revenue collection mechanisms in the Medina

Addressing specific constraints and opportunities - Improvement of the property registration system and the registration of properties within the

Medina - Exploration of mechanisms for addressing privately held dilapidated buildings - Further development of approaches for expropriation, taking national specifics into account - Explorations of proactive mechanisms such as land banking

5.2.3 Rehabilitation Programmes Requiring Strong Institutional Frameworks (Slow Wins)

The third component of the Investment Programme deals with countries and Medinas where either the

institutional framework for Medina rehabilitation is already in place, or where this is significantly under

development with support. This implies a higher level of ‘readiness’, that the public sector is taking the

rehabilitation of Medias seriously and is meaningfully championing related initiatives. Two main approaches

are relevant, namely: replicating large-scale, integrated IFI- financed Medina Support Programmes, and

introducing public private partnerships as a mechanism for financing and implementing rehabilitation.

1) Integrated IFI-financed Medina Support Programmes

Several major programmes for the rehabilitation of Medinas have been undertaken in some of the countries

included in the study. The best examples are the cultural heritage and tourism support programmes

promoted and financed by the World Bank, often in cooperation with the AFD and various donors, which

have been implemented in Lebanon, Tunisia, and Jordan (and earlier in Fez, Morocco). Some of these have

been national in scope, and others focus on particular Medinas or parts of them.

In the proposed Medinas 2030 investment strategy and its associated road map a very important type of

project to be considered is the large, IFI-multisectoral rehabilitation project. These projects normally have a

range of rehabilitation components and they can be focused on one Medina or across several Medinas in a

single country. These IFI projects have a number of antecedents in partner countries, as shown in Table 8,

and the means of economic justification are well known (usually un-quantifiable cost benefit analysis,

sometimes EIRR. Of crucial importance is a clear implementing agency, usually delegated by the sponsoring

ministry (with of course the agreement of the relevant ministry of finance and according to sovereign loan

protocols).

Depending on needs assessments in the target Medina(s), components of these projects may be some or all

of the following:

1. Basic infrastructure rehabilitation 2. Public space improvements and visitor circuits 3. Monument repair and renovation (mosques, wakalas, zaouias, walls, gates, etc), 4. Housing and other property improvement schemes, both loans and grants, both direct (social housing)

and indirect to property owners, sometimes involving resettlement of inhabitants) 5. Renovation or transformation and adaptive-reuse of historic structures for a number of purposes, such

as museums, cultural centres, handicraft outlets, hotels, restaurants, etc.) 6. Improve commercial spaces and opportunities 7. Local economic development and anti-poverty schemes where needed (business advice/incubators,

loans, youth training, etc.) 8. Support for traditional handicrafts (training, production space, product development, credit, marketing

including emporium space)



9. Encouragement of public-private partnerships and other innovative financing mechanisms 10. Social facilities serving the Medina population 11. Development of community organizations 12. Improved management and administration as well as capacity building for local authorities and

rehabilitation agents 13. Legal and regulatory reform, including incentives to encourage private investment in Medinas

In fact, such large multi-component projects can encompass virtually all of the types of interventions that

can be effective in revitalizing and rehabilitating Medinas. This is one of the main advantages of IFI-

multicomponent projects – that by their nature they can be designed to address the sum of a Medinas

crucial needs, they can allow for synergies across components to work, and they can also allow for

experimentation on new approaches. In effect, these projects are very much integrated approaches.

As part of the Medinas 2030 Programme, such large multi-component projects have additional advantages:

Such projects allow the coherent bundling of a number of small investments and interventions (which by the nature of Medinas are the main kinds of interventions) under one single loan arrangement

The size of such projects will easily pass the EIB project threshold of Euro 50 million (with a loan of at least Euro 25 million), and can call on NIF financing for project preparatory technical assistance.

Under a sovereign loan arrangement the requirement of full financial returns to all component investments can be relaxed. As pointed out in Section Two, in the past most interventions in Medinas, whether by national or local entities or by donors, have been under grant arrangements, and the review of potential pipeline projects identified in the 17 Medinas of the Medinas 2030 Pre-operational Study shows that grant financing is still the expected mode of most proposed interventions.

Following from the above point, a carefully designed IFI-multicomponent project can operate as a game changer in terms of financial sustainability in Medina operations. It can emphasize components that are either financially viable or that have at least partial cost-recovery, and thus demonstrate that there are ways of generating some surpluses out of Medina rehabilitation and that Medinas need not always seek outside grant funding for any worthwhile initiatives. For example, from the above list of 13 possible components, by concentrating on the components 4, 5, 6, 8, and 9 a IFI project could have a reasonable amount of financial viability

However, these large IFI-multi-component Medina rehabilitation projects have certain disadvantages. First,

they are slow to materialize and, in most cases, need considerable preparation. Two to five years seems to

be the preparation time up to loan effectiveness, based on the IFI-projects reviewed in Table 8). Secondly,

the imposition of two sets of bureaucratic rigidity (one from the host government, the other from the IFI)

can slow project implementation bedevil innovative sub-components. The quality performance of project

implementation units (PIUs) is crucial.

These drawbacks inherent in IFI multi-component Medina projects can be mitigated. Looking at the

proposed Investment Programme and its Road Map, the first Medina IFIs could ready for approval within

two years (end 2014) in Morocco, mainly because in the candidate Medinas there are already integrated

strategies and investment plans in place. Good cooperation with the concerned Agences Urbaines and

municipalities/wilayas in each city and also with national authorities is a must, and all indications are that an

EIB/NIF preparatory initiative would very well received in Morocco.

2) Public Private Partnerships

As part of the Medina rehabilitation program, Public Private Partnerships (PPP) offer an option for

improving rehabilitation financing and implementation. Structuring and implementing PPPs for Medina

rehabilitation does require a capable public sector and an appropriate institutional framework, and hence



the potential is limited to these situations. Given limits on public financing and the relative abundance of

private financing, the relevance of PPP approaches increases.

Integrated PPP models are relevant for, and are being increasingly used to finance and manage urban

development projects:

Integrated PPP models are forms of integrated contracting across different project phases and functions. By integrating design, commercial development, construction and long-term exploitation of assets the public and private sectors can achieve lifecycle efficiencies and – through the involvement of private finance of the required investments – are likely to find themselves dealing with private financiers who encourage and discipline the owners and agents of the project into achieving the best possible results.

In addition integrated PPP models integrate multiple business cases into a single business case. They can be used as tools to tie commercially non-viable public or social projects (e.g. public space refurbishment, cultural facilities, social housing, etc.) together with commercially viable projects (most commonly in real estate development for residential or commercial use) into a single business case. By doing this, such models enable cross-subsidization between commercially viable and non-viable activities or initiatives and thus relieve the burden of funding from resting entirely on the shoulders of the public sector.

PPP procurement and contracting should also be considered as an advanced form of regulation of the urban development sphere. In a traditional urban development arrangement, the dynamics of what happens in the urban area are either (a) left to the market’s pursuit of private interests and the way in which the market it is regulated through national law and municipal regulations or (b) are fully driven by the public sector in its pursuit of the broader public interest. In the integrated PPP model, by contrast, a PPP contract is used to regulate the behavior of private partners on a specific project such that the interests of both sides of the contract become aligned. This requires clear definition and separation of risks and roles between both partners.

The level of detail at which the contract regulates a certain urban development initiative may however differ. In fact an integrated PPP model offers a unique chance to encourage public sector agents to reflect on their ambitions and vision for a certain area, to define outputs desired from a project, and to leave room to private partners to devise the best possible solution to achieve those ambitions.



A specific note of caution is needed: integrated PPP models are not joint ventures. In a joint venture

approach, public and private sectors jointly participate as equal shareholders in the equity of a special

development vehicle. This type of arrangement makes it extremely difficult to achieve and regulate/enforce

a clear separation of interests, risks and roles between both partners. Because the public interest in the joint

venture often represents a broader political interest in the success of its undertakings, the public sector

tends to find itself at a disadvantage when the value of the equity shares of the joint venture deteriorates or

is at risk of deterioration. The private partner will tend to seek an easy exit from the project and leave the

public partner with a useless shell company and an unfinished (or not-yet-started) project.

Like a joint venture, an integrated PPP involves the setting up of a special project company or vehicle . The

most striking difference however is that the vehicle is fully privately owned and engages in a contractual

relationship with the relevant agency or contracting authority of the national/local government (as shown in

the below figure). This enables the contract to define the roles, interests and risks assigned to each party in

the partnership.

Private Development of an Entire Historic Area – Solidere, Beirut At the heart of Lebanon’s capital, Beirut Central District (BCD) is an area thousands of years old, traditionally a focus of business, finance, culture and leisure. BCD was devastated during the 1975 – 1990 Lebanon war, and prospects for its rehabilitation were initially marred by inadequate public resources, absenteeism and entangled property rights. An innovative legal and institutional framework has enabled the reconstruction of the area without continued recourse to public funds, through a government-empowered private development corporation, Solidere. Solidere's incorporation was based on legislation formulated for the reconstruction of severely war-damaged areas through the creation of real estate companies, subject to a duly approved master plan. Solidere, The Lebanese Company for the Development and Reconstruction of Beirut Central District s.a.l., was incorporated as a Lebanese joint-stock company in 1994. The Company was capitalized with contributions in kind, namely property rights for lots falling within the prewar city center, and cash subscriptions. Property rights holders were issued A shares, while subscribers to the initial private offering were issued B shares. They were also allowed to recuperate retained built lots subject to strict restoration conditions. Corresponding shares were relinquished and reverted to Solidere. Against financing and construction of the infrastructure and public domain for the entire BCD on behalf of the State, Solidere was granted ownership of 291,800 sq m of development land in the New Waterfront District. The declared objective is a balance in their operations between the preservation of certain historic structures and archaeological areas and the complete redevelopment of other sites. This market-driven operation has proven to be a very good sample in the provision of exceptional quality services and infrastructure ; and a show case of high quality renovation operations. This operational urban framework requires also a long period of time (the lifespan of Solidere has been extended from 25 up to 75 years), and its financial viability was mainly due to the integration of a large sea front zone ( that used to be a landfill) within the area to be developed by the company. Solidere provides an exceptional model of private involvement and management of the entire rehabilitation of an historic inner city area, including infrastructure provision and development control responsibilities usually managed by the public sector. Solidere provides an important case, however it required a dramatic context (complete post-war devastation and the political will and ability to transfer significant responsibilities and property rights) to be established. While it is unlikely that the model can be replicated entirely in the same way in a Medina, however Solidere’s experience (currently extended to Egypt and Gulf countries), should be considered for the establishment of any private or mixed structure for the Medina project.



Figure 5 Conceptual Model of Integrated Medina Rehabilitation via Public-Private Partnership

The above described advantages and characteristics of integrated PPP models come with certain

downsides. Most prominently, there is significant complexity in arranging and implementing such an

approach. Both public and private partners will need considerable capacity to be able to do what in most

cases will be a ‘first’. Following successful design and procurement of an integrated PPP contract, the

challenge then becomes to stick with the agreements made and oversee successful implementation of

complicated arrangements while maintaining a functioning working relationship.

Secondly, integrated PPP contracts, when combined with significant amounts of private finance, offer

loopholes that sometimes enable public authorities to commit to long-term liabilities (e.g. so-called

availability payments to close the viability gap in a social housing cum commercial real estate project) which

do not appear on the public balance sheet. However most of the Medinas studied are located in countries

which face considerable sovereign borrowing constraints . Therefore the case for using integrated PPPs with

private finance should be very robust. Even if it is not sovereign borrowing: if it looks like sovereign

borrowing, and if it behaves like sovereign borrowing, it is most likely sovereign borrowing.

Therefore the immediate relevance of integrated PPP models for implementation in Medinas is

questionable. Very few municipal authorities overseeing the Medinas in question can be thought of as

sufficiently capacitated to set up and implement an integrated PPP model. Considerable technical

assistance would be needed to develop and implement such a project. However the very nature of Medinas

and their potential economic dynamics also imply that, in the mid- to long-term, integrated PPP models are

potentially very interesting approaches. The case for PPP arrangements is warranted and supported by the

lingering economic and commercial potential of certain (parts of) Medinas, in combination with both the

multifunctional nature of these areas and the challenges related to historic preservation and improvement

of the livelihoods of the current and future population.

5.2.4 Alternative “Bottom up” Financing Mechanisms and Structures for Medina Rehabilitation (Redundancy)

In many countries it will take many years for an appropriate national and local institutional framework for

Medinas to be put in place (and in some cases may never be achieved), and for large-scale and

comprehensive national Medina rehabilitation programmes (which is a dominantly top down approach) to

be structured and implemented. The fourth component of the Investment Programme therefore involves

Commercial activities / properties

Historic properties Public space

Area development vehicle

DONOR / FINANCIER X

DONOR / FINANCIER Y

DONOR / FINANCIER ..

DONOR / FINANCIER Z

Debt, Equity, Grants

National / local government



interventions and alternative financing mechanisms that can be used to rehabilitate Medinas even where a

coherent national or local institutional framework is not in place.

During the Pre-Operational Study a number of relevant potential alternative financing mechanisms for the

rehabilitation of Medinas were identified. It is recommended to further develop these mechanisms in the

context of the Investment Programme. It is probable that further or hybrid mechanisms will be identified

during this process. Five financing mechanisms and structures are identified with most potential for Medina

rehabilitation, namely:

a) Commodity-based rehabilitation financing b) Asset management model for religious endowments c) Improvement districts d) Additional ‘Medina windows’ within MSME credit lines and framework loans e) Housing finance and financing of property rehabilitation

a) Commodity-based Rehabilitation Financing

Commodity-based financing is an alternative financing mechanism that is used increasingly and successfully

by funds and financial facilities in the renewable energy area. Commodity financing works by mobilising

local producers and distributors to market and promote financing products that are integrated with a service

and commodity supply offer. For example, the dominant flow from the Green for Growth Fund in SE Europe

with KfW is a commodity based offering to local banks, and through the local banks to distributors of solar

and other environmentally friendly equipment. Local households and businesses in the equipment is

installed pay off the distributors over time rather than requiring the full payment upfront.

In the context of Medina rehabilitation, commodity finance (or Hire Purchase or lease to buy) would typically

be applicable for the range of commodities between a few hundred Euros to a few thousand Euros. In this

range could be included: energy units, alternative energy units, sanitation units, air-conditioning facilities (all

typically provided through local appliance retailers), doors, windows and packages of Medina specific

improvement materials (typically provided through local construction material retailers). A local bank or

banks utilising credit lines provided by an IFI provide financing to local commodity producers and

distributors, enabling them to market and provide these commodities to households and property owners in

Medinas as part of the rehabilitation and renovation of the properties. The commodities are provided by the

producers and distributors to households and property owners with a repayment contract (e.g. Hire

Purchase or lease to buy) instead of a fixed payment. There is further potential for commodity-based

financing to be provided together with a general property rehabilitation grant or loan for property owners in

Medinas.

A programme and credit line for commodity-based financing relevant for Medinas rehabilitation would need

to be developed by a sponsoring IFI together with a local partner bank, and in interaction with relevant

producers and distributors. It is possible that the programme could cover commodity-based financing in all

geographical areas allowing for a portfolio of sufficient size to be developed. This development stage for

commodity-based financing would require technical support.



Figure 6 Commodity-based Medina Rehabilitation Projects and Financing

b) Asset Management Model for Religious Endowments

Religious Endowments (“Awqaf” or “Habous”) once provided the Islamic city with the principal mechanism

for their urban development, a practice dating back over 1,000 years in the region. This was achieved

through endowing religious or charitable buildings with revenues derived from the rental of commercial and

residential property and/or agricultural land. These privately rented buildings, if maintained in accordance

with the terms of the endowment, were intended to provide the financial means in perpetuity for the

upkeep of the public buildings they served. Both private and public spatial realms were therefore united in

an economic and spiritual interdependency. This system, which cut across sectarian boundaries, was

prevalent in all the Medinas of the Islamic world and was designed to be durable and economically self-

sustaining.

Religious Endowments hold in trust properties of individuals given as charities or for specific financing

purposes (either kheiri or ahli). In Morocco,

Egypt and Lebanon, many important

historical buildings in Medinas are owned

and managed by such Religious

Endowments. In some Medinas, as much

as 10 to 20% of all historic buildings are so

owned and managed. Despite the abuse

of corrupt administrators and the efforts

of various post-independence

governments to grab the assets

incorporated within endowments, the

authorities (usually ministries) now in

possession of the physical legacy of the

endowment system (in the form of

commercial and residential property) are

still major stakeholders in the future

development of historic urban centres,

though they are often ignored in debates.

Endowed with Potential To date, relatively few examples can be cited to demonstrate a constructive engagement on the part of Awaqf authorities to the rehabilitation of their property portfolio (excluding their involvement in the maintenance of religious structures which is a responsibility often shared with other ministries such as Culture / Antiquities etc). Participants at the November 2012 Medinas 2030 Workshop noted that in Essaouira in Morocco the Ministry of Habous had undertaken the renovation of 100 housing units. In Aleppo in Syria the Assadiyeh Madrasa located in the Bab Qinnasrin and owned by the Awqaf, was re-used as an area-based health care center. This change of use was approved by the Awqaf, who remained the owner of the estate and the building. Though far from systematic, such examples are significant, and demonstrate that there is a constructive future in engaging Awqaf authorities in both area and building rehabilitation at different scales.



The properties held in trust by the Religious Endowments are managed to produce an annual income in

perpetuity. Properties usually cannot be sold or disposed of, and in some instances there are limits to the

functions which can be undertaken in the properties. While often holding significant historic assets, the

Religious Endowments have to date played almost no role in Medina rehabilitation schemes. Many of the

old properties they manage are in a bad state and the rents generated are negligible. The Religious

Endowment authorities in Morocco, Egypt and Lebanon are weak institutions. In Tunisia, the Religious

Endowment system was relatively recently abolished.

Given the fact that the physical legacy of the system survives, and often constitutes a major part of the

problem of dilapidated, misused, and unproductive buildings (usually of historic value) in Medinas across the

region, it would make a great deal of sense to engage in a strategic dialogue with the state-party owners of

these properties. There is considerable potential to develop asset management models that would improve

the condition and use of historic assets held by Religious Endowments, and also engage them as partners in

Medina rehabilitation. The aim would be to develop the potential of their sites in a modern manner while

respecting existing restraints (if any) in force from the original endowments. It should also be noted that the

fundamental principles of the waqf system are very much in line with current legislation and international

charters concerning the conservation of built heritage. A specific model for development is for the Religious

Endowments to enter into a concession arrangement with a private company or companies. This

arrangement ensures that the property assets remain in ownership and trust of the Religious Endowment,

but that determining the optimal use, possible upgrading and management of the property or properties is

undertaken by the concession company.

It is estimated that in some cases the revenue yielded by endowment properties under concession (and by

implication the potential for investment) could be dramatically increased. This model is possible for

individual properties as well as for property portfolios. A case is noted in which a Religious Endowment has

agreed to a property swop to deal with function restrictions in a property held in trust.

Figure 7 Management Model for Historic Property Assets held by Awqaf / Habous

It is noted that the Religious Endowments are conservative bodies, that there have been few cases of more

innovative approaches, and that basic contact and communication with the Religious Endowments can be

difficult. Considerable technical assistance will be required to identify Religious Endowments willing to

participate, and to develop and implement several pilot projects to create a demonstration effect.



c) Medina Improvement Districts

‘Improvement Districts’ have been used in a number of country and city contexts as a mechanism for

undertaking improvement of a specific geographical area of a city, usually the inner city. Internationally,

there is precedence of improvement districts being established also especially for historic inner city areas,

and the Improvement District model has been featured as an approach by UN Habitat24.

Improvement Districts are usually initiated in inner city areas where stakeholders become concerned about

the impact of decline in the area on their businesses and homes. As Improvement Districts usually have

highly visible positive impacts in a specific area, they are often copied by stakeholder in adjoining areas, or in

other inner cities.

An Improvement District is a voluntary

arrangement usually among property

owners in a defined part of an inner city

area (usually several city blocks or a

naturally defined section of the city).

Under the arrangement, property owners

identify the major problems they face in

their area, usually highly visible problems

such as crime, insufficient waste

management, congestion, or poor

maintenance of public spaces. The

property owners agree to pay a regular

(usually monthly) levee to be used for

improving such services and maintenance

in their area. The property owners

establish an appropriate entity (usually a

not-for-profit company) which employs a

manager who makes arrangements (e.g.

hiring staff, contracting services, etc.) for

the required services to be provided. The

property owners are continually closely

involved on how the entity operates, the

services provided and in turn the levee to

be paid.

24 UN Habitat, Best Practices on Social Sustainability in Historic District, ISBN: 978-92-1-131965-1.

Improvement Districts and Rehabilitation of Historic Inner Cities

The formal ‘improvement district’ model originated in the US in the face of inner city decline due to uncontrolled urban sprawl. Inner city property owners established what became known in the US as Business Improvement Districts (BIDs) to halt inner city decline by addressing visible aspects of decline (e.g. crime, urban blight) and creating conditions for improvement and reinvestment. The BID model was translated to South Africa in the 1990s, where the model was adapted to local conditions and established as ‘City Improvement Districts’ (CIDs). After initial (highly visible) demonstration effects from pilot CIDs in inner Johannesburg and similar initiatives in other cities (e.g. inner Cape Town), the model transferred rapidly to other inner city areas across the country and is now widely used. More than 50 improvement districts operate mainly in inner city areas of South African cities. Improvement districts are used also in Europe, notably in the United Kingdom. The Improvement District model is being used for rehabilitation and management of historic districts in cities in the US, in South Africa, and elsewhere. The historic dimension becomes central to the rehabilitation efforts and the branding and marketing of the local area by the improvement district.



Figure 8 Medina Improvement District Model

From international experience, it is often the case that Improvement Districts focus initially on addressing

the most immediate problems faced by property owners in the area (e.g. crime), and over time as the

Improvement District becomes more established they focus on more forward looking interventions, such as

marketing of the area and even undertaking capital investment projects.

The strength of Improvement Districts is that they are driven by local stakeholders themselves, they address

a defined inner city area, they are highly visible interventions, they can be self-replicating through their

visible demonstration effects, and they are by nature highly participatory. More formal systems of

Improvement Districts are backed by legislation, which inter alia makes the levee a compulsory payment for

all property owners in an area if a required majority of property owners wish to establish the district. They

are also usually linked to property taxation systems, and the levee once approved is often collected by the

local alongside property taxes government (and transferred to the Improvement District company).

The Improvement District model is a potentially relevant mechanism as part of Medina rehabilitation and

sustained management. There would be significant potential value of having functioning Medina

Improvement Districts, covering all or parts of individual Medinas. However, the formal Improvement

District model will need to be adapted to suite specific conditions. In particular, the property tax systems are

absent or weak in Medinas, there are cases of absentee property owners and semi-abandoned private

buildings (due inter alia to rent controls and lack of property registration), and there are many small owners

and tenants (making organisation logistically more difficult). As such, pilot or demonstration Medina

Improvement Districts would need to be established to tailor and demonstrate the model. These might be

successfully piloted in the trading centres in the Medinas building on local trader associations.

c) Additional Medina Windows within Wider Global / Framework Operations

As noted, Medina rehabilitation typically involves investing in a potentially large number of relatively small

projects. As described above, there is potential for bundling of multiple smaller projects into larger bundles.

With regard to financing for the further development of businesses and commercial activities in Medinas, by

definition these involve financing mainly for micro, small and medium enterprises, consistent with the

economic makeup of the Medinas. The aggregate size of this potential lending pool in Medinas alone is

considered too small to support a discrete operation. There are two opportunities in which these smaller

projects in Medinas can be addressed using existing operations:



Introducing ‘Medina Windows’ within existing MSME credit lines – there are global loan operations already running in the countries covered in the Pre-Operational Study providing credit lines to domestic partner banks for on-lending of smaller loans, including to families and for commercial purposes. There is potential to: - Assist partner banks to make existing MSME credit lines available in Medinas, together with

possible development and marketing of tailored products specific to the needs of MSMEs based in Medinas (such as loan size, eligible use, collateral requirements, etc.)

- Based on market viability, an IFI may provide additional funding within an existing credit line or lines with a geographical condition to specifically support lending for MSMEs in Medinas

Medina criteria within existing framework operations – specifically, an operation is currently being developed in Egypt for a framework loan to support the Social Fund for Development (SFD) which will provide principally grant funding for community infrastructure and housing; micro and SME development; and services of industrial clusters. It is proposed to add specific Medina criteria to the SFD operations to ensure investment is made in Medinas.

Specific opportunities identified where Medina windows can be added to existing operations are outlined

where found in the relevant country strategy and guidelines in Section 5.5.

d) Housing Finance and Financing of Property Rehabilitation

Housing is an important part of Medinas, and the need to improve housing and rehabilitate properties in

general is a core dimension of their rehabilitation. As described in Section 2, there have been relatively few

past efforts to improve the housing stock in Medinas, other than pure grant financing for remedial repairs of

deteriorating housing or for demolition and resettlement. As far as is known, there has been only one

promising non-grant experience, and that is in Tunis under the Oukalas Project (mortgage-backed property

improvement loans, financed by the Arab Fund for Social and Economic Development -- see Case Study in

Annex 1).

Loans for housing finance and property rehabilitation in Medinas under the Medinas 2030 Investment

Programme can be developed by IFIs together with domestic banks and MFIs, including the following types:

(1) Mortgage-backed property improvement loan schemes to owners in Medinas following the pioneer

example in Tunis

(2) Loans for housing purchase in Medinas (global or framework loans to existing national housing loan

schemes that exist, for example, in Tunisia and Morocco).

(3) Microcredit loans for small housing improvements in Medinas (special housing credit windows within

existing credit lines to MFIs)

(4) Involvement of the developer / contractor sector in property rehabilitation together with end-user property rehabilitation loans

The above financing products are relevant for encouraging and supporting housing and property

improvements in Medinas, thereby improving the physical environment and encouraging a stable residential

component. Two factors are important for their further development. First, the relatively small size of each

potential Medina housing loan portfolio suggests that such financing products either need to be developed

nationally (i.e. to be provided in all Medinas in a country), or need to cover lending also outside of the

Medinas themselves.



Second, the potential for organising finance for housing in general and for mortgage-backed financing in

particular is highly sensitive to the legal context and financial sector conditions in the countries concerned.

For example mortgage-backed financing is difficult in countries lacking the required legal framework,

cadastres and property registration. Hence these lending products for housing and property improvement in

Medinas will need to be developed in each country taking the specific market, financial sector and legal

conditions into account.

Another consideration for the further development of housing finance and property improvement loans for

Medinas is that the loan criteria needs to be carefully designed to ensure that the rehabilitation and

improvements that are made (including regarding new or altered structures) conform to architectural design

requirements (height, massing, façade treatment etc.) and also possibly materials requirements (e.g. use of

traditional materials). This in turn requires the capacity to ensure that the rehabilitation and improvement

activities are compliant. Examples exist in inter alia the United States of loan (and grant) schemes for the

rehabilitation of heritage buildings where rehabilitation works must be undertaken by certified ‘heritage’

contractors, often registered as such with the local government. And, under the Oukalas Project property

loan component in Tunis, such physical compliance was guaranteed by the Association de Sauvegarde de la

Medina de Tunis, a model that would be worth replicating wherever such technically competent entities

exist.

Finally, it must be recognized that while loans for housing and property redevelopment in Medinas can be

very beneficial in improving the building stock, they cannot of themselves guarantee a complete reversal of

the deteriorating housing and property trends in many Medinas. As mentioned in Section 2 and elaborated

in detail in the Country Reports, building decay is largely a problem related to the poor functioning of the

formal, registered property markets in the Medinas. As many observers have pointed out, to tackle this issue

a number of legal and institutional improvements are needed, and technical support for these could be

made available as contemplated in component 2 of the Investment Programme and suggested in the

specific country strategies and road maps presented in Section 5. Briefly, these include:

Explore with legal professionals the current possibilities of using the powers of expropriation for buildings liable to collapse and also abandoned ruins and vacant lots, especially for adaptive reuse of private buildings with historic or architectural value in medinas, including what amending legislation and other measures, such as redevelopment standards, might be required.

Investigate with the property registration and cadastre services in each country (especially in Morocco and Tunisia) the possibility of a programme for the application of systematic property registration and titling (‘immatriculation d’ensemble’) for all or parts of selected medinas

Assess the need for a small national programme to set up a GIS database for medinas, where parcel-by-parcel maps are prepared with specific layers that indicate property ownership and registration status, building condition, and grades of heritage value. In some medinas such efforts are already underway, but such an information base is crucial for a number of useful interventions in medinas and thus these efforts need to be sped up and standardised.



5.2.5 Summary of Identified Projects and Relevant Financing Instruments

A suite of traditional and alternative financing instruments is proposed as part of the four components of the

Medinas 2030 Investment Programme. Table 15 provides an overview of the various financial instruments

and their relevance for the various types of Medinas rehabilitation interventions. Table 16 then provides an

indication of the relevant financing instruments for the initial project pipeline identified in the countries and

Medinas during the Pre-Operational Study.

Role of Contractors in Area Conservation: al-Omrane in Morocco, and Cairo

The traditional conservation establishment has usually been suspicious of contractor-led area conservation initiatives. Heritage conservation is often a time-consuming and detailed operation for which many contractors are often ill-prepared and lack experience. Contractors are motivated by business considerations that may clash with the flexibility required in dealing with the ‘unknown’ element in the conservation of historic structures. Contractors are unfamiliar with the social and economic complexities of ‘place’ and have no vested interest in the needs of living communities. Notwithstanding these concerns, there are some models of contractor-led area conservation initiatives within the Medina 2030 area that suggest that this approach, given appropriate checks and balances, has a future. The al-Omrane holding company in Morocco has been responsible for a very large number of projects in Medinas that include infrastructure and public space improvements as well as fine architectural conservation. Their work has not been as extensive in the area of the reconstruction of residential structures threatened by collapse, but they are heavily involved in the construction of new housing units on the peripheries of Medinas to accommodate relocated Medina inhabitants. This balance between rehabilitation and new build is probably necessary for the financial viability of such projects. It is noticeable that in some cases inappropriate materials have been used within conservation areas, but in general the quality of interventions is good. In Cairo, the path of contractor-led conservation projects has focused on the conservation of registered historic sites with no consideration for their context. Arab Contractors and numerous other companies have executed many projects dealing with some of the most sensitive monuments in the historic core. The results of the work have been patchy, with both good and bad projects whose quality can be measured against the quality of supervision by conservation professionals. A major element missing from all projects is monitoring and planning for future maintenance, and such a finite, project-based, cycle is not a long-term solution to the problem of heritage conservation.



Table 15 Investment Components, Financial Instruments and Types of Rehabilitation Interventions

TYPES OF

REHABILITATION

INTERVENTIONS

INVESTMENT PROGRAMME COMPONENTS AND FINANCING INSTRUMENTS

Component 1 Component 2 Component 3 Component 4

Discrete

rehabilitation

projects

(mainly small

loans

through

partner

banks)

Small

rehabilitation

grants (less

than Euro 2

million)

TA for

strategic

studies

and

capacity

building

TA for

integrated

rehabilitation

plans

(national and

medina

levels)

Large

Integrated

IFI-funded

Projects

(Sovereign

Loans and

Grants)

PPP

arrangements

(project

loans)

Commodity-

based

rehabilitation

financing (via

global loans)

Religious

endowment

asset

management

models

(framework

loans)

Improvement

Districts

(limited

financing)

MSME

‘Medina

Windows’

(global

and

framework

loans)

Housing and

property

improvement

financing

(global and

framework

loans)

(1) Basic infrastructure

rehabilitation

XXXX XXXX XXXX XXXX XXXX

(2) Monument repair and

renovation

XXXX XXXX XXXX XXXX

(3) Public space

improvements & circuits


(4) Housing/property

improvement schemes

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

(5) Renovation and re-

use of historic structures

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

(6) Improve commercial

spaces & opportunities

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

(7) Local development &

anti-poverty schemes

XXXX XXXX XXXX XXXX

(8) Support for

traditional handicrafts


(9) Social facilities and

community development

XXXX XXXX XXXX XXXX

(10) Improved

management & capacity


(11) Legal and regulatory

reform

XXXX XXXX XXXX

(12) Titling & property

market improvements

XXXX XXXX XXXX



Table 16 Pre-Operational Study Project Pipeline and Financing Instruments

COUNTRY AND

MEDINA

INVESTMENT PROGRAMME FINANCING INSTRUMENTS

Component 1 Component 2 Component 3 Component 4

Discrete

rehabilitation

projects

(mainly small

loans

through

partner

banks)

Small

rehabilitation

grants (less

than Euro 2

million)

TA for

strategic

studies

and

capacity

building

TA for

integrated

rehabilitation

plans

Large

Integrated

IFI-funded

Projects

+TA

(Sovereign

Loans and

Grants)

PPP

arrangements

(project loans)

Commodity-

based

rehabilitation

financing (via

global loans)

Religious

endowment

asset

management

models

(framework

loans)

Improvement

Districts

(limited

financing)

MSME

‘Medina

Windows’

(global and

framework

loans)

Housing and

property

improvement

financing

(global and

framework

loans)

MOROCCO At

national

level

With new

national

Medina

agency

With

national

MFIs

With

national

banks

Salé M-1, M-2,

and M-3

Yes M-4

Essaouira M-5, M-6,

M-7,

possibly

M-8

Casablanca Projects for 2014-2020 and TA needs are under formulation by the Medina of Casablanca Comité de Pilotage

Tétouan M-9, M-10,

M-11, and

M-13

M-12

Meknès M-14

through

M-19,

possibly

M-20

TUNISIA At

national

level

With

national

MFIs

With

national

banks



Tunis

T-1 Yes Yes T-2 T-3 and T-4

Kairouan

T-5, T-6 Yes T-7*

Sousse T-11*, T-12*,

and T-13*

T-8, T-9, and

T-10

Yes

Sfax No projects currently identified due to political events

EGYPT

Historic Cairo E-1 E-2, E-5, and

E-6

E-1 and

E-4

E-3 E-7 and

E-8

E-7

JORDAN

Karak J-1 J-2 J-4 J-3

Jerash No projects currently identified

LEBANON

Tripoli and Al Mina L-1, L-2, L-3,

L-4 and L-5

Sidon L-6 and L-7 L-9 L-8

Tyre L-10, L-12,

and L-14

L-11* and

L-13*

Baalbek L-15, L-16, L-

17, and L-18

* May require limited accompanying grant financing



5.3 Proposed Medinas 2030 Facility

Financing projects to rehabilitate Medinas is nuanced and involves interventions in complex areas of the city.

The Pre-Operational Study has found that further support is needed inter alia in project identification and

preparation in Medinas and countries to facilitate rehabilitation investment projects. A key issue is how best

to organise in an effective manner the wider package of technical assistance, grants and investments

comprising the Medinas 2030 Investment Programme. Europe has substantial relevant experience in

providing both technical support, grants and investment support to its southern and eastern Mediterranean

neighbours, involving especially the blending of technical and financial investment, as well as blending of

grants and other financing sources. A number of examples of funds, facilities and similar support institutions

exist (some operating only in Europe and some relevant for the Medinas region) that provide examples of

potential institutional and funding arrangements for the Medinas 2030, including:

Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and the FEMIP Trust Fund, sponsoring the current study, which coordinates provision of operations (loans, equity, guarantees) and advisory support

Neighbourhood Investment Facility (NIF), offering technical assistance and investments grants

Urban Projects Finance Initiative (funded by NIF), providing technical assistance for project development

Mediterranean Hot Spot Investment Programme – Project Preparation and Implementation Facility (funded by FEMIP), mobilising technical assistance for the identification and preparation of projects

Joint European Support for Sustainable Investment in City Areas (JESSICA), a financial engineering facility allowing for the allocation of EU structural funds into revolving urban project facilities

Joint Assistance to Support Projects in European Regions (JASPERS), a technical assistance facility for preparation of major projects for European co-funding

Many other sectoral and regional funds and facilities supporting blended funding, including Investment Facility for Central Asia, Asian Investment Facility, Latin America Investment Facility, etc.

Two other international urban facilities are also of demonstration relevance for the Medinas 2030

Investment Programme, namely:

Cities Alliance, a multi donor facility that supports preparation of City Development Strategies, sustainable slum upgrading programmes, and national and local level urban policies by providing Catalytic Fund grants, advocacy and communication, and technical assistance

Cities Development Initiative Asia (CDIA), a multi donor and IFI facility that supported Asian cities and countries to bridge the gap between their development plans and the implementation of their infrastructure investments. CDIA uses a demand driven approach to support the identification and development of urban investment projects in the framework of existing city development plans that emphasize environmental sustainability, pro-poor development, good governance, and climate change. CDIA provides a range of international and domestic expertise to cities that can include support for the preparation of pre-feasibility studies for high priority infrastructure investment projects, capacity building, knowledge sharing and other support.



These later two facilities are especially significant examples as they respond to a quite similar urban

challenge as faced by the Medinas 2030 Investment Programme. However, they address the whole gamut of

urban development issues and are not specifically focused on the rehabilitation of urban historic cores. Still,

they can provide useful guidance on the nature of arrangements appropriate for taking forward such

initiatives.

In this context the Pre-Operational Study assessed the relevance of a possible Medinas Fund or Facility to

take forward the Medinas 2030 Investment Programme in an effective and sustainable way.

5.3.1 Rationale for a Medinas 2030 Facility

The Medinas and countries require technical assistance to prepare and manage effective and sustainable

Medina rehabilitation and preservation projects and activities. Such pre-investment is required to establish a

larger scale of potential investment activities in individual Medinas, countries and in the region. This pre-

investment in project preparation may also begin to build the portfolio of rehabilitation projects that may

lead in time to the establishment of a Medinas Fund (discussed later).

Taking forward the Medinas 2030 Investment Programme requires provision of technical assistance to

countries and their Medinas in three main areas:

a. Assisting countries, cities and Medinas in recognizing the importance of Medina

rehabilitation and in preparing their initiatives for Medina rehabilitation and preservation

b. Assisting in the further identification and formulation of specific investment projects and innovative structures for Medina rehabilitation

c. Assisting to improve systemic problems facing Medinas and establishing effective and

sustainable Medina management approaches and institutional arrangements

The technical expertise involved in the rehabilitation and preservation of Medinas is highly specialized in

nature. This applies to the development of strategies, plans and approaches to rehabilitation, as well as the

identification and formulation of specific rehabilitation projects. Systemic improvement of Medinas and the

establishment of institutional arrangements for their management have specific elements, however there

are consistencies with wider reform, modernisation and strengthening activities of local government and

urban development.

The study is of the view that the Medinas 2030 Investment Programme cannot be adequately mobilised via

existing facilities alone, and that a dedicated facility providing the required pre-investment support is

required. This is further supported by the following strategic considerations:

Momentum

The Medinas 2030 initiative has established a brand around the ‘Medina’, and created

considerable attention to the issue of rehabilitation. It is valuable to build further and create more

momentum. A dedicated facility can contribute in this regard.

Focus

A range of technical assistance, grants and financing is provided by existing European, bi- and

multi-lateral facilities in the southern and eastern Mediterranean region. However these facilities

are focused primarily on larger, wider-scale and/or sectorally-focused investments of which

potential Medina involvement would be only a minor part. There is a risk that the specific needs

of Medina rehabilitation would not be sufficiently addressed, and that the focus needed for real

impact would not be achieved.

Scale

Within the wider regional context and the overall size of the urban sectors in the southern and



eastern Mediterranean region, the Medinas are relatively small components representing a small

percentage of the urban population, city areas and economies. In terms of the potential capital

investment scale of rehabilitation projects, the Medinas are therefore far smaller than sectors

such as energy, transport, etc. The investment scale alone does not support the need for a

dedicated facility. However, while the aggregate scale of Medinas is relatively small, their unique

and distinctive heritage is valued in Europe and the region.

Specialization

The nature of expertise and skills involved in Medina rehabilitation is specialized. This applies to

1. the process of developing actual rehabilitation strategies, approaches, management and

financing forms, 2. the formulation of projects for rehabilitation, and 3. the tailored design and

management of (TA and grant) support for Medina rehabilitation activities. The need for this

specialization supports the need for a dedicated facility.

Impact

Many external actors have been involved in the Medinas rehabilitation space and a number of

discrete projects have been undertaken. There is potential to increase collective impact through a

more coordinated approach to the Medinas via a dedicated facility with multiple participants.

This will also contribute to stronger signalling within the region regarding the importance of

Medina rehabilitation and management.

5.3.2 Concept Design – Medinas 2030 Facility

The Pre-Operational Study finds a rationale for investment in Medina rehabilitation, and a rationale for a

dedicated Medina 2030 Facility providing pre-investment in technical assistance and support to implement

the Investment Programme. Comparable facilities exist both in European experience, and internationally in

examples such as the Cities Alliance and Cities Development Initiative Asia. These facilities are supported by

multiple funders and sponsors and provide a combination of technical assistance and grant support to assist

cities with sustainable planning, management and infrastructure and service delivery.

The proposed Medinas 2030 Facility would provide pre-investment support following a demand-driven

approach that encourages and rewards local (country, city and Medina) initiatives. The proposed Medinas

2030 Facility would comprise two main functional components, namely:

1. Technical Support Function – providing direct technical assistance and grant support for promotion

and communication, capacity building and knowledge exchange, formulation of national, city and Medina level initiatives, and addressing systemic improvements in support of Medina rehabilitation

2. Project Preparation Function – providing direct technical assistance and grant support (e.g. small grants for the appointment of consultants) for the identification and formulation of rehabilitation projects, and assistance in access to blended financing (e.g. grants, debt, equity, guarantees) from existing institutions (e.g. EIB, CDC, AFD, WB) and facilities (e.g. NIF, FEMIP)

The conceptual outline of the Medinas 2030 Facility is provided graphically below, followed by more detailed

description of the governance, funding and operation of the facility.



Figure 9 Conceptual Outline of Dedicated Medinas 2030 Facility

With regard to Medinas rehabilitation the rationale exists for a similar facility, but more closely focused on

the specific target region and specialized aspects involved in such rehabilitation activities. The Medinas 2030

Facility, as depicted in Figure 9, would focus on implementing the various components of the Investment

Programme, namely:

Component 1 (the relatively quick wins), would be implemented through the Project Identification and Preparation Function

Component 2 (short term sowing) would be covered by the TA Function

Component 3 (longer terms wins) would be setup by the TA function and Project Identification and Preparation Function

Component 4 (redundancy) may be implemented through the TA Function and Project Identification and Preparation Function

Under the proposed Programme Roadmap (Section 5.1 below), such a Medinas Facility would be created

developed over a two-year exploratory phase, initially starting as a small cell within the EIB (or elsewhere).



Purpose and Objectives of the Medinas 2030 Facility

Provide support to promote further investment in Medinas rehabilitation in participating countries and cities

in the southern and eastern Mediterranean region. Main objectives:

- Promotion, communication and awareness-raising - Facilitating best practices and knowledge sharing - Capacity building - Supporting country and city / Medina level initiatives - Supporting systemic changes in support of Medinas rehabilitation - Project formulation - Supporting access to finance

Main Activities of the Medinas 2030 Facility a) Promotion, awareness-raising and knowledge transfer b) Technical assistance – direct advice and TA grants

- Capacity building - Organizing rehabilitation strategies (national, Medina level) - Establishment of Medina rehabilitation and management institutional arrangements - Project formulation - Project implementation

c) Access to finance - Advise on and support access to financing products available from neighbourhood country partners - Advise financing partners of the Facility on further product development

Governance

The governance of the facility should strive for high level participation to create profile and support for the

facility. It should also reflect the main sponsors and beneficiaries of the facility. It is proposed to establish a

governing body (potentially the Medinas 2030 Steering Committee, but more focused on operational issues

as a ‘board of directors’) including:

- Participating southern and eastern Mediterranean countries (beneficiaries) - European sponsors - Other external promoters - Experts

Funding

It may be appropriate to obtain initial start-up funding for the Facility (as a small core located in an

institution in Europe or the region) from FEMIP or NIF. Core funding – used to operate the facility and for

technical assistance support. Possible also that technical assistance grants could be provided out of core

funding. It may be necessary for the facility to access supplemental funding for technical assistance from

other partners, particularly from existing EU Mediterranean initiatives. Associated funding are made

available by participants via their existing funding lines.

Co-sponsored: - Grant (possibly via FTF) - Member - Beneficiary countries

The Medinas 2030 Facility and initiative should only operate in countries that are active partners that show

real commitment to the Medinas 2030 programme and that are making or pledging financial contributions

to Medina Investment Programme projects sponsored in their countries.

Organisation and Operational Management of the Facility

In the interests of efficiency and effectiveness, it is proposed not to establish the facility as a separate new

organisation. A full-time facility Manager (potentially EIB as part of its contribution to the facility) should be

appointed to act on behalf of the governing body. The Manager will appoint through a competitive process a



private entity25 or entities on a time-bound management contract as Operational Manager of the facility.

The facility and Operational Manager will mobilise further resources and expertise from the market. This

model potentially provides better efficiency for the operation of the facility and more flexibility to respond

to scale or service change.

External Partners and Co-financiers for the Medinas 2030 Programme

There are a very wide range of international and donor institutions that could be partners and/or co-

financiers in the Medinas 2030 Programme. Table X presents a longlist of some 37 of these institutions.

However, the number of agencies that are interested or active in urban rehabilitation is quite restricted,

amounting only to some 13 institutions, as shown in Table Y. And virtually all of these have other agendas

besides urban rehabilitation and, also, some may not operate in MENA region.26 The Cities Alliance, among

others, is a case in point. It is mainly concerned with developing city-wide development strategies and

identifying urban investment projects through consultative processes, and although in particular towns

historic centre rehabilitation may be covered, the emphasis is on better city management and development

as a whole. Thus although the Cities Alliance represents the kind of agency with an exclusive urban focus,

urban rehabilitation tends to be marginalized within the very much larger urban field.

As pointed out in Section 2, Medinas and historic urban centres in the five target countries of the MENA

region represent only a tiny and diminishing weight within the urban sectors (currently only some 1 to 4

percent of each country’s urban population). And the urban sector, which in the target countries represents

well over two-thirds of each country’s population, is truly vast and expanding. Thus in dialogues with urban

sector partners (including urban departments within IFIs) the Medinas 2030 Programme will be faced with

the challenge of demonstrating the relevance of historic rehabilitation and urban heritage as an important

issue, especially when compared to huge urban challenges such as slums, housing, transport, the

environment, and economic development.

During the meeting of the Medinas 2030 Programme Scientific Committee in November 2012 it was

mentioned that the EIB is planning include the Medinas Programme within a new programme called

Sustainable Urban Development in Mediterranean cities (SUD-MED – ten countries) and a related initiative

called the Urban Projects Finance Initiative (UPFI), which focuses on integrated urban development projects

at the level of the whole city. Should this relationship become operational, it will be crucial for the Medinas

Investment Programme to champion the importance of urban rehabilitation within the larger SUD-MED

arena.

For these reasons the main sponsors of the Medinas 2030 Investment Programme should utilise the Pre-

Operational Study findings to attract co-funding contributions for the Facility as well as for specific projects

within the Investment Programme (especially for projects with grant-components). And in this it will need to

understand the current and evolving agendas of particular partners. For example, many donors are pushing

environmental concerns and the need for energy conservation, and Medinas could well benefit from eco-

technologies such as electric vehicles, solar powered street lighting, etc. The Medinas 2030 Investment

Programme will need to perform a ‘lobbying’ function that actively seeks out sources of such grant

financing. In these efforts to engage external partners it will be a decided advantage if the Medinas 2030

Programme has already developed close and fruitful relations with the governments of the target countries.

Table 17 Long List of Potential Partners and Co-financiers for the Medinas 2030 Investment Programme

International and Bilateral Finance Institutions

European Investment Bank • CDC • World Bank • AFD (through specialized agency) • EBRD • African

Development Bank • KfW • Nordic Investment Bank • SIMEST (Italy) • AECID • OeEB (Austria) •

25 Private firm, organization or semi-private agency. 26 The Aga Khan Cultural Trust, which has carried out significant rehabilitation work in Historic Cairo, is now closing down most

of its operations in Egypt. And it has no plans to re-focus on rehabilitation and cultural heritage in any of the MENA countries. It

is understood that it is shifting focus to East Africa.



Sociedade para o Financiamento do Desenolvimento • Luxembourg Directorate for Development and

Cooperation

EU/EuroAid Funded Agencies and Programmes (mainly grants)

NIF (including SANAD, EGP/BAS) • FEMIP Trust Fund • Union for the Mediterranean (UfM) • EVD

(Private Sector Investment Programme) • Euromed – Euromed Heritage 4 and various smaller

programmes

Arab Funds, Banks, and Agencies Islamic Bank • Arab Fund for Economic And Social Development • SAMA Holding, KSA • Investment Corporation of Dubai • Mubadala Development Company, Abu Dhabi • Arab Towns Organization and Arab Urban Development Institute

Private Investment Funds Al Qudra Holding Abu Dhabi • Emaar Dubai • Citadel Capital, Cairo

Foundations

Aga Khan • Hariri Foundation

Networks GIZ CoMun (RIT-M) • European municipalities partnerships with Arab Cities (e.g. Mairie de Paris) • Euromed Union for the Mediterranean • Anna Lindh Foundation • UNESCO and World Heritage Fund • Cities Alliance (World Bank, UNHabitat)

Other donors

GIZ • Belgian Aid • DfID • UNDP • UnHabitat • UNESCO • Noraid • CIDA • SIDA • Italian Aid

There are a number of IFIs and other organisations that have been, or are currently involved in urban

rehabilitation. A shortlist of the most relevant potential co-sponsors of the Medias 2030 Investment

Programme and the Medinas 2030 Facility is presented in Table 18. It is proposed that detailed consultation

take place with these organisations in the immediate term.

Table 18 Prospective Medinas 2030 Partners and Co-Funders Active in Urban Rehabilitation

European Investment Bank • World Bank Cultural Heritage Operations, including Italian Trust Fund for

Culture and Sustainable Development • CDC • AFD • NIF • FEMIP Trust Fund • Union for the

Mediterranean (UfM) • Euromed – Euromed Heritage 4 and various smaller programmes • Arab Fund for

Economic And Social Development (Kuwait Fund) • Aga Khan • GIZ • European municipalities partnerships

with Arab Cities • Anna Lindh Foundation • UNESCO and World Heritage Fund • Cities Alliance • GIZ

CoMun (RIT-M) • UnHabitat (urban heritage conservation) • UNESCO

5.3.3 Longer Term Potential for a Medinas 2030 Fund

The rationale for establishing a regional Medinas 2030 Fund – a commercial or (partly) revolving Fund27 - was

assessed. At this stage of the Medinas rehabilitation market, the Pre-Operational Study did not find

sufficient supporting conditions that would warrant establishment of a dedicated regional Medinas Fund.

Specifically, two considerations are important:

27 A Fund being defined as a dedicated pool of funds with a fund manager acting with the objective of attaining a target Return

on Investment on the Fund through investment in projects associated with Medina rehabilitation.



1. The potential portfolio of Medina rehabilitation projects that exists in the region at present is very limited. Further support is first needed in market development, project identification and preparation before a project pipeline will exist to enable effective commitment of a regional Medinas Fund.

2. The characteristics of the majority of rehabilitation projects are primarily of a non-commercial and

public nature. Opportunities for commercial returns on rehabilitation projects that would sustain a Fund are limited. Medina rehabilitation projects are de facto funded primarily via grants and/or financed by sovereign loans.

The Pre-Operational Study has not found a rationale for establishing a dedicated regional Medinas Fund in

the short term. However, as further Medina rehabilitation initiatives and projects are developed via the

Medinas 2030 Investment Programme in coming years, it is expected that conditions for establishing a

Medinas 2030 Fund may develop.

Importantly, there is potential for establishing Medina Rehabilitation Funds (principally public and not

seeking commercial returns) as a mechanism for implementing national Medina rehabilitation programmes.

As noted, this may be relevant for example in the case of Morocco where a rehabilitation fund could be

realised at much shorter timeframes as part of a national Medinas programme. The study recommends to

include the assessment of and assistance in setting up such funds as part of the TA to be included in the

Medina 2030 Facility brief.



6 Proposed Roadmap for the Medinas 2030 Investment Programme

6.1 Roadmap for Taking Forward the Medinas 2030 Investment Programme

This roadmap covers how the Medinas 2030 Investment Programme can be taken forward. It is divided into

three phases, namely:

Phase 1 2013 – 2014 (2 years)

Phase 2 2015 – 2019 (5 years)

Phase 3 220 – 2030 (11 years).

The phasing and indeed the pace of development of the Investment Programme cannot be rigidly defined as

it is demand-responsive and there will need to be shifts and adjustments towards the end of each phase. The

Investment Programme is also designed with maximum flexibility in mind to take into account the pace of

development within partner countries and Medinas. The main features of the proposed road map are:

Expand the programme incrementally in terms of Medinas, concentrating first on the ten classic Medinas found in Morocco, Tunisia, and Egypt, then on other Medinas within these countries (especially in Morocco)

Expand the programme incrementally in terms of countries, giving first priority to Morocco, then Tunisia, then Egypt, and lastly Lebanon and Jordan. Other countries with important classic Medinas, such as Libya, Algeria, and Palestine, should be subject to small exploratory efforts to assess in value-for-money terms the inclusion of their Medinas into the Investment Programme

Design considerable flexibility and periodic assessment into the Medina Investment Programme. This is unavoidable, since all possible investment projects will be demand driven, and it is not possible to predict project identification and selections outcomes

Following from the above point, the timetable of the programme must include “decision points” in which the critical paths of programme expansion, in terms of projects, Medinas, and countries, are carefully assessed

This roadmap is reflects therefore a country-by-country, incremental and self-adjusting approach of the

Investment Programme The country by country approach is based on the realization that initiating and

operating a Medinas Investment Programme in a particular country involves unavoidable technical

assistance and transaction costs. This means that attempting to launch efforts in all countries in parallel will

be complicated and expensive, and prioritizing them in terms of programme ‘economies of scale’ is

important. This prioritization is based on the following facts:

Morocco has the greatest number of classic Medinas by far and these have considerable heritage value to be preserved and enhanced. Much experience has been gained in efforts to preserve and rehabilitate these Medinas, but the need for more and better interventions remains critical. Also, the country is the most advanced in terms of national policy towards Medinas and has the most developed integrated rehabilitation plans for specific Medinas. Finally, of the five countries covered, Morocco has been the least destablised by the Arab spring.

Tunisia should take high priority in a Medinas Programme effort (second after Morocco). Tunisia has a number of extremely important Medinas both in terms of history and in terms of architectural



heritage. Also, it has had considerable experience in Medina rehabilitation, and has evolved interesting institutional approaches (both for the Medina and for the adjacent nouvelles villes).

Egypt currently suffers from political and governance problems, but there are sound reasons for a Medinas 2030 Programme to engage in rehabilitation of the very rich urban heritage found in Historic Cairo, through a small and exploratory effort in the short term, hopefully leading to investment projects in the medium and long terms.

Lebanon and Jordan do not have distinct classic Medinas, and the target historic city centres and archaeological towns do exhibit extraordinary heritage value when compared to the classic Medinas of North Africa. Moreover, in Lebanon there is a large and well-funded integrated rehabilitation project currently underway in all target towns (WB, AFD, and Italian financed Cultural Heritage and Urban Development Project under CDR) that is addressing most of the issues of preserving and enhancing urban cultural heritage. Similarly, in Jordan the two target archaeological towns exhibit only meagre urban heritage value, and they have recently been the subject of integrated rehabilitation efforts (WB Third Tourism Project under MOTA and also USAID and JICA grant financed improvement measures). Thus in both countries it could be said that urban heritage rehabilitation is a confined space that is already crowed. It will be difficult to identify and design substantial rehabilitation projects, even with considerable preparatory efforts. In this light, Medina 2030 Programme efforts should be limited in the short and medium terms to maintaining a constructive dialogue with potential partners and the pursuit of (relatively) quick wins with the private sector through existing framework loans.

6.1.1 Phase One 2013-2014 (2 Years) Exploratory Phase

(1) Establish a small, dedicated unit within the EIB or other appropriate institution for the Medinas 2030 Investment Programme

At a minimum, one full time consultant and one or two interns to support the EIB representative responsible

for this start-up phase who will also take a major role (half time or more). It is recommended to obtain

FEMIP and/or NIF funding for the initial start-up phase.

Tasks:

Monitor and liaise with activities in Morocco under (2)

Establish dialogue with Tunisia including (1) preparatory TA to develop a project of property loans on

the model of FADES, (2) investigation of possible quick wins for private investment through existing

framework loans, (3) engagement with Sfax, Sousse and Kairouan to encourage development of

comprehensive plans, (4) assistance for ASM-Tunis to find grant funding for some of their projects. It

may be that it is most efficient for any follow up and technical investigations associated with these

four activities to be undertaken by the consultant team based in Morocco under (2)

Make at least one or two field visits to Egypt, Lebanon, and Jordan each year to keep them appraised;

have flexibility for more field visits if more quick wins are identified

In all specific country investigations, identify crucial needs for strategic rehabilitation plans and

accompanying action plans and their timetables at the level of individual medinas, and incorporate

these into possible preparatory TA packages to be undertaken in Phase II.

Reach out to other donors in a systematic way and seek other grant funds for crucial TA and for

leverage. In particular, engage with AFD and World Bank to see if they want to co-finance pipeline

projects and activities



Carry out systematic investigations of mechanisms for financing Medinas 2030 Programme elements

to deepen and verify the initial conclusions developed as part of the Pre-operational Study (as

elaborated in Section 4 of this report), both for loan and grant financing, with emphasis on means of

blending the two.

Field visits to each of Libya, Algeria, and Palestine to explore value-added of including these countries

within the Medina 2030 programme

(2) Establish a presence in Morocco

A two year preparatory assignment to a consulting firm, based in Rabat, using NIF or FEMIP funds, and

liaising continuously with the EIB office.

Tasks:

Prepare sound pre-feasibility / investment plan for Essaouira and Meknès, NIF – EIB as a preferred

model, with good financial return profile in at least Essaouira

Assist Ministère de l Habitat, de l’Urbanisme, et de la Politique de la Ville / Ministry of Housing,

Urbanism and City Policy (MHUPV)in its national policy efforts and provide technical support. The

consultant firm could be partnered with the Ministry or with a new organization

Seek out private investment opportunities in other Medinas, creating quick wins, especially through

existing framework loans

Network with Medinas, especially concerning possible investments, using CoMun as a springboard.

Evaluate the addition of more Moroccan Medinas to the first five

Design and supervise small local TAs for (1) helping the Comités de Pilotage of Casablanca and Salé to

elaborate their unified rehabilitation plans (2) exploring with lawyers the powers of expropriation for

adaptive reuse in Medinas (3) investigating with the Service de Cadastre the application of systematic

property registration (‘immatriculation d’ensemble’) for all or parts of selected Medinas (4) creating

with the Ministry of Culture an extended, tiered, system of site registration and a legal framework for

adaptive re-use of historic structures for commercial purposes

6.1.2 Phase Two 2015-2019 (5 Years) Expansion Phase

This phase will begin with a stock taking of the Investment Programme achievements during Phase One and

in particular an assessment on the governments (and private sector) of each country are beginning to buy

into the Programme. This will need careful evaluation, and may shift parameters. Thus the following

proposed tasks must be tentative:

If appropriate, convert EIB ‘cell’ into Medinas 2030 Facility

Early in Phase Two it is proposed that the cell in the EIB be converted into a Medinas 2030 Facility that could

handle the increased management and more complex set of activities (including playing around with new

financial instruments).

Activities for Phase Two:

(1) Operationalize first SME loans in Morocco and Tunisia and other Quick Win Projects. Include

also other countries if they come up with discrete bankable projects for private quick wins, principally using existing framework loans to private investors and existing EIB loan officers responsible for each country. This will require a positive bias, since loan officers usually only consider larger-scale projects



(2) Implement large scale, national ‘slow win’ projects in Morocco and possibly Tunisia. Prepare

and initiate large-scale, national “slow win” projects in probably Essaouira and Meknès and possibly other selected Medinas in Morocco, preferably with the new national fund as maitre d’ouvrage (project preparation, go to board, multiple cofinanciers, pilot demonstration components). Standard preparatory consultant recruited NIF financed, Moroccan loan guarantee and agreement on PIU.

(3) Pre-feasibility studies for more investment projects (both integrated sovereign loan types and

discrete – such as hotels in converted historic buildings) in other Moroccan and Tunisian Medinas.

(4) Set up consultant team for two years (2015-16) in Tunisia modeled after that in Morocco, with

roughly the same brief. This team might also carry out assessments in neighboring countries. They would assist in the first instance with the launching of housing and building loans in Tunisia identified in Phase One, all early wins.

(5) At start of Phase Two, develop a tentative five year plan for the Programme in Jordan,

Lebanon, and Egypt, and , as required launch exploratory consultant team(s).

(6) Launch a project identification study in Libya and Algeria and Palestine.

6.1.3 Phase Three 2020-2030 (11 Years) Consolidation Phase

By 2020 the Investment Programme would be fully running. It will probably continue to be managed by the

Facility set up at the beginning of Phase Two rather than separate fund, unless the volume of investments

greatly expands in Phase Two to justify such a fund.

In Phase Three there would be consulting teams operating in various countries, missions from the Facility to

the partner countries would be common, and there will be an increasing list of candidate projects of all

varieties. Also, large integrated Medina rehabilitation projects are expected to be running by the beginning

of Phase Three in Morroco and, perhaps, other countries. In addition, more innovative financing

mechanisms are expected to have been launched, at least on a pilot basis. In effect, the investment portfolio

of the Facility is expected to become substantial and to increase in size at least through the first half of

Phase Three.

Given this increasing activity load, there will be a need for effective means to monitor projects and initiatives

and to provide feedback for new Investment Programme initiatives. To be explored would be the idea of

setting up technical offices for the Investment Programme in important countries to handle the larger sets

of activities.

2013 – 2014

Exploration

Dedicated Medinas unit / cell in EIB conducting initial investment work in Morocco and Tunisia

Establish presence in Morocco to implement national and local interventions



2015 – 2019

Expansion

Upgrade EIB ‘cell’ to Medinas 2030 Facility

Continue and extend interventions in Morocco and Tunisia

Develop and implement initiatives in other countries based on demand and responsiveness

2020 – 2030

Consolidation

Medinas 2030 Facility operational

Programmers in all neighbourhood partner countries

Possible Medinas 2030 Fund dependent on volume and potential portfolio characteristics

6.2 Strategy and Guidelines for Rehabilitation Investment Operations in Each Country

In this Section the basic strategies to be adopted in each country for the advancement of the Medinas 2030

Programme are presented. These follow directly from the overall strategic approaches detailed for the

Investment Programme overall. The aim is to give strategic guidelines that are well grounded in the specifics

of each of the five countries. This emphasis on a country-level focus reflects the Consultants’ conviction that,

while a regional approach for a Medinas facility/fund is correct, it is at the country level (including the

Medina level) that efforts must be concentrated, that key stakeholders are engaged, and that progress in

the Medinas 2030 Investment Programme will be achieved.

For each country, an overall strategy is elaborated, possible quick-wins and their promoters are identified as

are longer term slow wins, including broad-based integrated programmes. Also addressed are structural

strengthening issues, mainly institutional in nature, as well as alternative financing issues. Finally,

indications are given on how the Medinas 2030 Roadmap might apply in each country.

6.2.1 Morocco Strategic Guidelines and Roadmap

Overall Strategy

As mentioned in the above Section on programme scope and coverage, Morocco should take first priority in

a Medinas Programme effort. Morocco has the greatest number of classic Medinas of any MENA region

country by far, and these have considerable heritage value to be preserved and enhanced. Much experience

has been gained in efforts to preserve and rehabilitate these Medinas, but the need for more and better

interventions remains critical. Also, the country is the most advanced in terms of a national policy towards

Medinas and has the most developed integrated rehabilitation plans for specific Medinas. Finally, of the five

countries covered, Morocco has been the least destabilised by the Arab spring.

Thus an early and profound engagement in Morocco is called for. The main elements of the strategy should

comprise:

generating more private sector interest including possible PPPs

Medina associations strengthening and municipal exchange

strongly supporting national institution building

addressing the property HMR obstacle

aiming for relatively early integrated multi-sectoral projects e.g. Essaouira and Meknes.



These strategic elements are elaborated below:

1. Short term private sector interests

Whereas there were no very quick wins identified in the Consultant’s review of Moroccan Medinas, there are

quite a few that could be eventually brought to appraisal, especially as part of existing framework loans for

private investments. Examples of projects might include bijou hotels and maisons d’hote, housing units for

young professionals and government cadres, clean business premises, etc. There could also be interest by

corporate investors in larger projects (including adaptive reuse of historic structures for hotels under

possible PPPs). A small effort would need to be expended to reach out and try to identify possible private

investors and possible specific projects.

2. Supporting Medina associations and municipal exchange (structural strengthening at local level)

In the short term there would be considerable value in providing a small amount of technical assistance to

the committees of pilotage and/or the municipalities in Casablanca and Salé and perhaps Tétouan to

elaborate medium term rehabilitation programmes and associated projects (with an emphasis on those that

generate financial returns) and to identify quick wins for financing.

Through GIZ’s CoMun network among municipalities and other vehicles, the aims and opportunities of the

evolving Medina 2030 Programme in Morocco should be disseminated. As part of this effort, a small

investigation of including more Medinas in Morocco into the Programme from the initial five should be

carried out. There are some 26 Medinas that could be assessed, but initially priority would go to those larger

Medinas with good project investment potential.

3. Immediate and medium support for national policy and institutions (structural strengthening at the

national level)

Currently three ministries in Morocco, led by the Ministère de l’Habitat, de l’Urbanisme, et de la Politique de

la Ville / Ministry of Housing, Urbanism and City Policy (MHUPV), are engaged in investigating the legal,

institutional, and financial framework for a national programme for Medina rehabilitation. Should the

Moroccan Government so request, the Medina 2030 Programme could provide advice and examples of best

practices, especially for the proposed new financing institution, exposing it to appropriate and innovative

financing mechanisms and ways of leveraging its own-source funds to attract financing. As part of this

institutional support effort, the Ministry of Habous should also be engaged.

There are five specific investigations that would add considerable value to an evolving national policy

towards Medina conservation and rehabilitation in Morocco, and the Medina 2030 Programme could

support these with small amounts of technical assistance:28

Explore with legal professionals the current possibilities of using the powers of expropriation for

buildings liable to collapse (habitat menacant ruine or HMR) and also abandoned ruins and vacant

lots, especially for adaptive reuse of private buildings with historic or architectural value in Medinas,

including what amending legislation and other measures, such as redevelopment standards, might be

required.

Investigate with the Service de Cadastre the possibility of a programme for the application of

systematic property registration and titling (‘immatriculation d’ensemble’) for all or parts of selected

Medinas

28 Although these suggested small investigations would contribute greatly to improved strategies towards cultural preservation

and rehabilitation of Moroccan medinas, they do not in themselves lead to investment projects. Thus classic NIF or FEMIP

financing may not be available, and the Medina 2030 Programme would have an important role in identifying other sources of

technical assistance funds, such as are to be found in a number of EU Mediterranean partnerships.



Assess the need for a small national programme to set up a GIS database for Moroccan Medinas,

where parcel by parcel maps are prepared with specific layers that indicate property ownership and

registration status, HMR building condition, and grades of heritage value. In some Medinas such

efforts are already underway, but such an information base is crucial for a number of useful

interventions in Medinas and thus these efforts need to be sped up and standardised.

Investigate the creation within the Ministry of Culture an extended, tiered, system of site registration

in historic Medinas and a legal framework for their protection that expands on existing registration

lists to include other structures of heritage value in Medinas, including small scale individual building

features and larger-scale specific Medina-scapes.

Support a national initiative to ensure that conservation and preservation measures are of high quality

and integrity (with standards for materials and construction to complement existing legislation as well

as strategies for maintenance), and assess the establishment of conservation units/ateliers at the

Medina or regional levels.

4. Early support for broad-based Integrated Programmes

For each of the five target Medinas in Morocco, it is important to revisit their current rehabilitation

programmes such as they exist and, according to a rapid prefeasibility study, prepare integrated, multi-

sectoral and multi-component projects that would be financed by IFI sovereign loans. These would be

“enhanced classic” integrated projects which, compared to past such projects in a number of countries,

would have more emphasis on revenue generation, more private engagement including PPP elements, and

more focus on SMEs and on clean technology transfer. The Medina of Essouaira is especially ripe for such an

integrated project approach because of the potential of the mellah and the adjacent industrial zone. Meknes

would also be a priority candidate. The lead times for such projects are long (prefeasibility, feasibility,

project appraisal, negotiations, arranging co-financing, board and parliamentary approvals etc.) and thus an

early start in the most promising Medinas is warranted.

5. Longer term support for more broad based integrated programmes

Depending on the results of the early support for broad-based integrated programmes in some of the five

target Medinas, it should be possible to replicate these in other Medinas of Morocco. This would significantly

build up the Medina 2030 Programme portfolio, and since the scope and operational arrangements would

have already been established in the earlier integrated programmes, these ‘second round’ projects would

have shorter lead times and less associated expenses.

It may be that, for efficiency purposes, integrated Medina rehabilitation projects of the types considered

here might be rolled together and packaged as one very large Moroccan national urban heritage project.

This would be one of the options to keep on the table.



Suggested Elements of a Roadmap for Morocco

2013 – 2014

Exploration

Prepare sound pre-feasibility / investment plans for Essaouira and Meknès, and perhaps another one or two Medinas of Morocco, to pave the way for”enhanced” integrated project preparation that will result in project launching early in Phase Two.

Assist Ministère de l Habitat, de l’Urbanisme, et de la Politique de la Ville / Ministry of Housing, Urbanism and City Policy (MHUPV) in its national policy efforts and provide technical support. This support should include technical assistance for five specific investigations identified above.

Seek out private investment opportunities in other Medinas (including larger Medinas not part of the five Medinas studies), creating quick wins, especially through existing framework loans

Network with Medinas, especially concerning possible investments, using CoMun as a springboard. Evaluate the addition of more Moroccan Medinas to the first five

Design and supervise small local TAs for (1) helping the Comités de Pilotage of Casablanca and Salé to elaborate their unified rehabilitation plans (2) exploring with lawyers the powers of expropriation for adaptive reuse in Medinas (3) investigating with the Service de Cadastre the application of systematic property registration (‘immatriculation d’ensemble’) for all or parts of selected Medinas (4) creating with the Ministry of Culture an extended, tiered, system of site registration and a legal framework for adaptive re-use of historic structures for commercial purposes

2015 – 2020

Expansion

Launch “enhanced” integrated rehabilitation projects under IFI financing for the two to four Medinas for which pre-feasibility studies were completed and approved during Phase One.

Generally, extend the remit of the Medinas Programme incrementally to include all larger Moroccan Medinas, using monitoring of earlier project formation process to refine approach.

Explore PPPs as identified in 2013-2014, such as for the Kasbah of Tetouan

Prepare for second round of “enhanced” integrated projects perhaps in Sale, Casa, Tetouan, and Tangier

“Piggybacking”:Investigate the feasibility of opening special windows for Medinas within existing national microcredit programmes, aimed at SME and artisans in all Medinas of Morocco.



2021 – 2030

Consolidation

Launch the second round of “enhanced” integrated projects identified in Phase Two.

Depending on successes and feedback , within Year Three of Phase Three undertake the preparation of a third round of “enhanced” integrated Medina projects and launch them for implementation

Depending on early successes in promoting PPPs, extend such experiences to other Medinas and actively promote them

Depending on early successes in piggybacking onto national credit and MSME programmes with a specific bias for Medinas, deepen the expand these initiatives.

6.2.2 Tunisia Strategic Guidelines and Roadmap

Overall Strategy

As mentioned in the Roadmap Section above (5.1) and also as detailed in the Tunisia Country report (Volume

Two) Tunisia should take high priority in a Medinas Programme effort (second after Morocco) in the early

“exploratory” phase. Tunisia has a number of extremely important Medinas both in terms of history and in

terms of architectural heritage (especially Tunisia). Also, it has had considerable experience in Medina

rehabilitation, and has evolved interesting institutitional approaches. (both for the Medina and for the

adjacent nouvelle ville)

However, there is some lingering political instability that should subside after the elections in 2013/2014,

after which it can be expected that both the economy and tourism should slowly recover. Thus a profound if

slightly delayed engagement in Tunisia is called for.

The main elements of the strategy for this engagement in Tunisia will include generating private sector

interest in Medina investments including possible PPPs, exploring property loan programmes, strengthening

Medina associations and municipal exchange, supporting national institution building and addressing the

property and registration obstacles. There will also be investigations towards including additional smaller

Medinas into the Programme portfolio, and in the medium to long term a shift towards integrated multi-

sectoral projects, especially in Tunis. These strategic elements are elaborated below:

Quick wins

There are a number of smaller sized projects in the target Medinas that have been identified that could

quickly be elaborated for appraisal and funding. However, these are mainly public space improvements that

will require grant funding. If a funding source could be found for these, they would serve as early wins.

Short term private sector interests

Existing framework loan MSME programmes at the national level should be investigated to see if special

credit windows with special criteria for private investors/developers seeking opportunities in the Medinas

(e.g. for investments in bijou hotels, restaurants, handicraft emporiums, young professional housing, and

clean business premises). One such is existing EIB framework MSME loans through Al Amene Bank, which

has already provided investment loans to at least one Medina investor. It is certainly worth a small effort to

reach out and try to identify possible private investors and possible kinds of projects in Medinas.



(3) Short/medium term preparations for and launching of mortgage-backed housing loan programmes

aimed at Medinas

A mortgage-backed property improvement loan programme, modelled after the former Oukalas project

component that was funded by the Arab Fund for Social and Economic Development (see Tunisia Country

report) should take priority for development. This would cover the Medina of Tunis and its faubourgs, and

could be easily expanded to other Medinas. A local bank, the ASMs, and perhaps ARRU would be partners.

A special loan window for families seeking to acquire housing in the Medinas could be opened as part of the

FROPOLOS Djedid housing loan programme, administered by the Banque de l’Habitat. This needs

exploring.

(4) Supporting Medina associations and municipal exchange (structural strengthening at local level)

A small amount of technical assistance would be given to ASMs in Sousse, Sfax, and Kairouan to elaborate

medium term rehab programmes and associated projects and identify quick wins for financing.

The GIZ-supported CoMun Network is operating in Morocco and plans to expand soon to Medinas in Tunisia.

This will provide an excellent network for discussion and dissemination of Medina rehabilitation amongst

Tunisian Medinas and also for exchanges between Moroccan and Tunisian Medinas. More Medinas (other

than the target 4 Medinas) should be included in the networking and early project identification.

(5) Support for national policy and institutions (structural strengthening at national level)

Support should be given to policy moves by the Tunisian government to create at the national level legal,

funding, and institutional frameworks for more effective Medina rehabilitation, based the 2012 paper on the

subject prepared by a consultant for the Ministry of Interior with AFD financing. This report provides an

excellent platform for needed policy change and reform. Support would include the provision of advice and

examples of best practices in historical rehabilitation from different regions of the world and also of

appropriate and innovative financing mechanisms and ways of leveraging own-source funds to attract

financing. A small amount of technical assistance support would be called for. This TA could be bundled to

include:

Support efforts for greater use of State expropriation for ruined and abandoned building and for

buildings liable to collapse, including methods for redevelopment and rehabilitation of these

properties by both government and the private sector in ways that guarantee historical and

streetscape continuity and that, in some cases, would generate investment financing opportunities

for the Medina 2030 Programme.

Strengthening of the legal operational framework for historic conservation and preservation with the

Ministry of Culture – Insitute National du Patrimoine, including the development a listing system that

expands on existing registered sites to include non-monumental but architecturally- valuable private

structures and Medina-streetscapes.

Ensure that conservation and preservation measures are of high quality and integrity in terms of

standards for materials and construction and perhaps establish conservation units/ateliers at the

Medina level.

Support all ASMs and their partner municipalities to install or expand parcel-by-parcel GIS databases

for all properties in individual Medinas. These databases would include constantly-updated layers

showing property ownership / registration, recent property transactions, building dangers, etc.

(6) Longer term support for more broad based integrated programmes

Based on initial project identification carried out in (4) above, support the prepareon for IFI sovereign loan

type integrated multi-sectoral projects. These would be “enhanced classic” IFI projects compared to past

such projects, with more revenue generation, more private engagement including PPP elements, more



focus on SMEs and handicrafts, clean technology transfer, and the introduction of better traffic

management and green vehicles.

Other Medinas should be studied to assess the feasibility of preparing for such integrated programmes in

other, smaller Medinas of Tunisia.

Suggested Elements of a Roadmap for Tunisia

2013 – 2015

Exploration

Explore possible early wins projects and identify possible sources of grant financing

Strengthen ASMs through small TA in Sfax, Sousse, and Kariouan. This could be coupled with support for a GIS-based inventory of all properties in each Medina.

Intensive investigations to assess feasibility of mortgage-backed housing loan programmes aimed at Medinas (action 3 above).

Investigate possible private investor opportunities in a number of Medinas would take priority to generate quick wins through MSME framework loans and possibly PPPs

Begin dialogue with and support for national level institutional reform for Medinas, (action 5 above), based on the recent paper prepared for the Ministry of Interior.

2016 – 2020

Expansion

Extend remit of Medina Programme incrementally to other, smaller Tunisian Medinas, using monitoring of earlier project formation process to refine approach.

Establish a simple system for requests for proposals coming from ASMs/Municipalities as well as from the private sector. If an entity has a really viable project they should step up at any time.

Launch mortgage-backed housing loan programmes aimed at Medinas

Investigate need for further SME and artisanat support in Medinas, perhaps by piggybacking on national micro-credit programmes

Undertake preparatory TA for potential “enhanced” integrated projects, especially in Tunis



2021 – 2030

Consolidation

Carry out mid-term M&E for mortgage-backed housing loan programmes and expand/adjust scope

Launch the first “enhanced” integrated IFI-financed projects

Refine and deepen other actions from earlier periods

6.2.3 Egypt Strategic Guidelines and Roadmap

Overall strategy

As detailed in the Egypt Country Report (Volume Two), the situation in Historic Cairo is currently bleak as

regards the potential for sustainable rehabilitation projects. Historically, this has been due to a failure on the

part of government institutions to adapt an integrated approach to heritage management for Historic Cairo

and an absence of monitoring and maintenance mechanisms. These failures have been compounded in the

post-revolutionary period by continuing political instability and the complete lack of enforcement of existing

controls over illegal construction -- a situation that is rapidly altering the fabric and character of the historic

area. There is presently little interest in the political sphere to engage in Historic Cairo, whether at national

or municipality levels. Tourism, especially cultural tourism, is currently very depressed in Egypt and

especially Cairo and there seems little prospect of a rapid return to pre-revolutionary levels. There is a

deepening fiscal crisis in government, and it was the government that largely funded recent major

rehabilitation measures such as the ‘Historic Cairo Project’. The Aga Khan Trust for Culture and its Historic

Cities Support Programme – hitherto the most significant international presence and the only multi-sectoral

rehabilitation and conservation effort, is furthermore leaving the arena. All these factors are likely to

increase the marginalization of Historic Cairo within the larger agglomeration of Greater Cairo.

While the picture for the revitalisation of Historic Cairo may seem gloomy now, there are some strong

reasons why Historic Cairo represents – in the long run -- a better opportunity for investment in urban

rehabilitation than ever before. These reasons can be summarised as follows:

The Ministry of State for Antiquities and its operational arm, the Supreme Council for Antiquities, face serious financial difficulties and are now for the first time looking favourably at projects involving re-use of historic structures that could create revenue streams.

The Ministry of Endowments is also aware of the financial potential of redeveloping derelict sites in its sole ownership.

The multi-sectoral work of the Aga Khan Trust for Culture in the Darb al-Ahmar over the past decade -- in rehabilitation of privately owned structures, community engagement projects, the formation of ‘Muzalla’ NGO with secure financing, the development of public spaces, support for handicrafts, etc., has created a climate and consciousness favourable to the principle and practice of rehabilitation as a tool to create improved an economic as well as physical environment.

There is a significant “community” of NGOs and international heritage donors that, if mobilized effectively, could work for advocacy as well as preservation in Historic Cairo. Examples include AFESD - Arab Fund for Social and Economic Development, ARCE - American Research Centre in Egypt, CIERA - Italian-Egyptian Centre for Restoration and Archaeology, CSDHC - Centre for Studies and Development



of Historic Cairo, DAI - Deutsches Archaeologisches Institut, FEDA – Friends of Environment and Development Association (Gamalia Sustainable Development Project), Egyptian Swiss Development Fund, United Consultants for Architecture and Urban Design (Salah Zaki), Polish-Egyptian Restauration Project Mission, Royal Danish Academy Mission, and IFAO -- l’Institut Francais d’Archaeologie Oriental.

UNESCO has recently (November 2012) published the results of its three year effort in defining the limits of Historic Cairo that includes proposals for urgent protection measures zone by zone and for heritage awareness campaigns. This is the first phase of the World Heritage Centre’s Urban Regeneration of Historic Cairo Project (URHC). Subsequent phases aim to (1) define a clear strategy for urban regeneration of Historic Cairo, focusing on conservation and rehabilitation, (2) establish a comprehensive management plan, (3) establish and enforce general protection measures and development controls in collaboration with concerned administrations, and (4) identify a priority action area with an action plan to implement a conservation strategy as a pilot that could be replicated across Historic Cairo.

The ever increasing traffic congestion throughout Greater Cairo puts a real estate premium upon central locations, including Historic Cairo, and there is some evidence that private investment in housing and non-residential establishments is reviving in the area after a long decline.

All the key ‘clusters’ of the most important monuments in Historic Cairo have now been conserved and are accessible to visitors. This provides an excellent starting point for further rehabilitation of adjacent properties.

Thus strategically for a Medinas 2030 Programme in Egypt, there are good potentials but they will need

careful nurturing and the long view is necessary. In the short and medium terms this means (1) engaging in

dialogue with, and building the structural capacity of, potential partners, (2) encouraging/funding visible

pilot projects (‘quick wins’) to send signals that Historic Cairo is not a forgotten backwater, that there are

private investment opportunities, and that there is strong international recognition of the outstanding

heritage value of Historic Cairo (3) directing some of the already existing national programmes towards

Historic Cairo (urban regeneration/upgrading projects, MSME loan schemes and micro-credit) as a kind of

piggy-backing. These options are developed further below in the ‘short-medium’ and ‘long’ terms:

Short to Medium Term Strategy

The recommended short to medium term strategy (roughly over five years) would focus on engaging in

dialogue with partners and structural strengthening, supporting and funding quick wins with the private

sector and with PPPs, and piggy-backing and partnerships with existing finance institutions.

1 Engaging in dialogue with partners and structural strengthening

The main targeted organisations will be the Ministry of State for Antiquities (and its implementing arm the

Supreme Council for Antiquities), the Ministry of Awqafs, and the Governorate of Cairo. This would aim at

the structural strengthening of these organizations in their capacities of dealing with Historic Cairo and in

promoting projects. A key step would be the creation or strengthening of units within each entity that would

be responsible for monitoring the area and designing rehabilitation projects. (The SCA already has an active

unit for Historic Cairo that needs technical support, and Cairo Governorate has considered such a unit in the

past.) These units could perhaps be linked within the overall framework that has now been developed by

UNESCO.29 The MSA/SCA would be encouraged to:

Begin to adapt a policy of adaptive reuse (and revenue generation) of likely heritage structures in Historic Cairo and to launch at least a few such initiatives as pilots.

29 UNESCO’s current project, “Urban Rehabilitation of Historic Cairo”, is associated with the National Organisation for Urban

Harmony, with which UNESCO has signed a protocol. However, the UNESCO report clearly identifies the Ministry of Antiquities

(with the Supreme Council for Antiquities) and Cairo Governorate as the key players in the rehabilitation of Historic Cairo.



Reassume its traditional role of supplying conservation and craft expertise for projects, a role that has been undermined by the shift to contractor-led projects with no follow-up or maintenance. A programme of training workshops could be part of this process.

A unit within the Ministry of Awqaf would be breaking new ground. With technical support, its first order of

business would be to inventory all its properties in Historic Cairo, however derelict, that might have potential

for rehabilitation and which, after private investments, would generate considerably enhanced revenues

streams for the Ministry. Another task for this unit would be to support the quick wins itemized below. A

third task would be to develop model leasing and BOT contracts that would be suitable for such converted

properties.

2 ‘Quick Wins’, the Private Sector, and PPPs

A number of specific area and building rehabilitation schemes have already been identified that are either

led by the private sector or which could be developed as PPPs.

The Darb al-Labbana, private

Wikalat Qait Bey, possible PPP

Oda Basha, possible PPP

Although thus far lacking financial plans, these projects illustrate the presence of single responsible

partners, both from public and private spheres, who could develop and maintain profitable urban

rehabilitation programmes. These projects also have the benefit of being located close to major traffic

arteries that would obviate the need to penetrate the densest areas of the historic city that remain

problematic for vehicular access. If even a single one of these projects could be achieved within the next five

years it would signal the real possibility of creating economically viable rehabilitation projects in Cairo.

Ideally two projects situated on opposite sides of the city – one in the north area (north wall) and one in the

south area (Citadel) – would demonstrate that possibility at a larger scale.

There may be other private investment opportunities in Historic Cairo that might be uncovered in the short

term that could also be considered quick wins. They may not be very large or ambitious, but for the reasons

given above any such opportunities would contribute to the demonstration affect and be very welcome. This

implies that a small but continuous effort of project and investor identification should continue in the short

and medium terms.

3 Piggy-backing and Partnerships

There are a number of countrywide programmes in Egypt that provide micro and SME loans to individuals

and enterprises, either directly or through NGOs and CBOs, mainly with donor financial support. These

include four public sector banks, one commercial bank, the Small Enterprise Development Organisation of

SFD, the Microfinance Department of SFD, and a number of dedicated micro-finance institutions. In fact,

Egypt is considered one of the region’s leaders in terms of microfinance.30 In addition, the Postal Service

(with thousands of branches in Egypt) provides micro-savings facilities and is considering opening micro-

finance windows.

In addition, an agreement has recently been signed between the EIB and the SFD for a new community

development project which will include significant funding for both for micro and SME loans and, on a pilot

basis, for housing improvements in Egypt. The geographic scope of this project is still not determined,

although individuals and enterprises in poorer urban areas are considered an important part of potential

demand for these loans.

30 See Central Bank of Egypt and SFD, “National Strategy for Microfinance,” 2006, for a review of the microfinance sector.



It would seem logical that an effort is expended to investigate the possibility of steering some of these

programmes specifically towards individuals and enterprises (including traditional craft manufacturers) in

Historic Cairo.31 With a population of some 375,000 mostly low-income inhabitants and thousands of mainly

small enterprises, it would seem logical that a special effort be made to encourage a strong presence by of

these micro and SME finance institutions and their local partners/branches in Historic Cairo. One way of

arguing for this would be to offer some topping-up finance added to existing funds used by these credit

institutions.

Long Term Strategy

In the longer term, the strategy for Historic Cairo will need to be reconsidered and recalibrated in the light of

experience during the first five years. Also, within five years all of the negative aspects of the Arab Spring

(lack of building control, fiscal problems in government, and the depressed tourism industry) should have

disappeared, resulting in a climate more positive to a range of interventions in Historic Cairo. The following

are strategic considerations assuming that at least some the earlier initiatives show progress.

1. Continue dialogues with partners and their structural strengthening

Continue the dialogues and support efforts initiated at the outset of the programme in Egypt with the

Ministry of State for Antiquities (and its implementing arm the Supreme Council for Antiquities), the

Ministry of Awqafs, and the Governorate of Cairo. Further institutional partners might be added, such as the

Egypt Environmental Affairs Agency (under the Ministry of State for Environment) to tackle systematically

the solid waste management issue. Structural strengthening would include development project

identification and management skills, monitoring and reporting procedures.

2. Develop more discrete rehabilitation projects with the private sector

Assuming there is some success in developing ‘quick wins’ with the private sector in the short and medium

terms, more such projects could be identified and funded, especially in partnerships with the Historic Cairo

units set up and/or strengthened in the short to medium terms.

3. Broad-based Support Programmes (Slow Wins)

In the long run, it may be that a multi-sectoral project with IFI financing and a sovereign loan could be

developed for a significant part of Historic Cairo. Two obvious candidates for sectoral development would be

the North Gamaliya Zone (adjacent to the Khan al-Khalili and Sharia Mu’izz heritage area) and the Citadel

Zone (restructuring the entrance to the Citadel and rehabilitating areas within the lower enclosure as well as

adjacent to it) This approach is predicated upon economic recovery and the return of tourism together with

a clear project management structure.

Suggested Elements of a Roadmap for Egypt

2013 – 2014

Exploration

Initial meetings with the 3 main institutional stakeholders. Focus should be on improved mechanisms to achieve objectives of immediate safeguarding of threatened heritage and promotion of principles of adaptive re-use.

At same time, promote ‘quick wins’ through framework loans to specific rehabilitation projects

Small TA for main stakeholders to create and/or strengthen Historic Cairo cells in the three main

31 There is a micro finance institution which started operations in Historic Cairo but has since expanded to a national scale. The

First Microfinance Foundation Egypt (set up under the Aga Khan Agency for Microfinance) has a significant micro-loan portfolio

and it also provides non-financial services through its Business Development Services (BDS) Centre in Darb al-Ahmar (Historic

Cairo) established under the Canadian International Development Agency’s Cairo Economic Livelihood Project.



institutional stakeholders

Negotiate with SFD and others for piggyback lending

Engage the donor/NGO community especially for possible mixed grant financing for specific rehabilitation/preservation projects; perhaps sponsor a workshop or two to raise awareness and promote exchange of ideas. Such workshops to include representatives from the business community/entrepreneurs.

2015 – 2020

Expansion

Promote PPPs with MSA/SCA and Awqaf; preparatory TA, leading to PPP contracts and maybe IFI financing.

Identify and design a multi-sectoral project with IFI financing and sovereign loan for area rehabilitation. In all discussions with the government which would precede any broad-based support programmes with IFI and grant funding, it should be made clear that if control over non-compliant private construction is not improved, funds cannot be made available.

Monitoring and re-adjustment of Historic Cairo management structures (cells within the three main partner organizations).

2021 – 2030

Consolidation

Implementation and evaluation of existing PPP contracts and creation of new contracts/projects.

Design, implementation and evaluation of multi-sectoral project with IFI financing and sovereign loan for area specific rehabilitation

Extension of project methodology to include ‘Downtown’ Cairo, a major heritage site and part of buffer zone to Historic Cairo. This would include engagement with existing investors in downtown Cairo, such as the private Ismailia Company. In fact, dialogues could start earlier, even in Phase One, with such investors.

6.2.4 Lebanon Strategic Guidelines

As analysed in the Lebanon Country Report, in the five towns investigated (Tripoli plus Al Mina, Sidon, Tyre,

and Baalbeck) there are not many investment projects identified, and these are small, will need considerable

elaboration, involve public space/traffic or building improvements, and all will require mainly grant

financing. Also, there is currently considerable political uncertainty especially at the municipal level, mainly

related to events in neighbouring Syria. In addition, the tourism industry in Lebanon is currently in serious

decline. In any event, the Cultural Heritage and Urban Development (CHUD) Project has already focussed on

the most promising rehabilitation activities to be carried out in these towns, and this large multi-donor

funded project will continue to run until 2014. Thus the strategy for a Medinas 2030 Programme in Lebanon

is, in the short term, largely one of “wait and see.”



This implies that until 2014 or 2015 only a minimal engagement is called for, mainly in the form of Medina

Programme missions once or twice a year that would maintain a dialogue with municipalities and also the

Council for Development and Reconstruction (the implementing agency for the CHUD project). It may be

that as a result of these missions some early win projects will be identified, and if so these should be

investigated for possible funding post 2014 under existing framework loan programmes perhaps blended

with grant financing from other Medinas Programme partner sources.

In the medium and long term, there may be opportunities for a more expanded engagement in Lebanon.

This will become clearer once the CHUD project approaches its conclusion, once the CDR has had a chance

to think strategically about further investments in urban rehabilitation, and once municipal officials have

better political mandates and can begin to concentrate on development and urban rehabilitation issues.

Also, it may be that some interesting PPP projects can be identified, as well as those that blend private

foundation funds with loans.

6.2.5 Jordan Strategic Guidelines

As analysed in the Jordan Country Report, in the two small towns investigated (Jerash and Karak) there are

almost no investment projects identified, and with one exception these are small, will need considerable

elaboration, involve public space or traffic circulation improvements, and will require mainly grant financing.

Also, there is currently some political uncertainty at the municipal level, and the tourism industry in Jordan is

currently in serious depressed. In any event, there are two donor-supported projects that are either running

or that have just been completed (e.g. those supported by the World Bank and USAID), and have already

focussed on the most promising rehabilitation activities to be carried out in these towns. Within the Ministry

of Tourism and Antiquities a strategy is being elaborated of rehabilitating other small heritage towns and

nature parks in Jordan to diversify the tourism product, but these towns (and in particular the small town of

Salt that contains some outstanding traditional domestic architecture) are very small and are unlikely of

themselves to represent a potential volume of investments that would justify interest on the part of the

Medinas 2030 Programme. Thus the strategy for a Medinas 2030 Programme in Jordan is, like that in

Lebaon, in the short term, largely one of “wait and see.”

There are two possible exceptions to this minimal approach. A private hotel project in Karak is “ready to go”

and the developer is currently seeking financing on advantageous terms. This project could represent a very

early win for the Programme, and it could be financed out of an existing framework loan in Jordan. (See the

Jordan Country Report.) Also, in 2011 a large urban redevelopment project was announced by the Greater

Amman Municipality for Wadi Amman, the traditional downtown area of the capital that contains

archaeological ruins and some historic buildings. This is more a multi-sectora urban regeneration project

than a historic rehabilitation project and for this reason probably cannot be considered as part of the

Medinas 2030 Investment Programme. However, it does represent an interesting large PPP formula for

redevelopment and could perhaps be considered for funding under other IFI programmes to Jordan. (See the

Jordan Country Report for details.

This ‘wait and see’ strategy for Jordan implies that until 2014 or 2015 only a minimal engagement is called

for, mainly in the form of Medina Programme missions once or twice a year that would maintain a dialogue

with MOTA, MOMA and municipalities, and potential private investors in the tourism sector. It may well be

that as a result of these missions some early win projects will be identified, and if so these should be

investigated for possible funding post 2014 under existing framework loan programmes perhaps blended

with grant financing from other Medinas Programme partner sources.

In the medium and long term, there may be opportunities for a more expanded engagement in Jordan. This

will become clearer in the post 2014 period once the Jordanian Government finds a way out of the current

fiscal crisis, political uncertainties at the municipal level are resolved, and tourism rebounds. MOTA would

be the prime candidate as a government implementing agency. Also, it may be that some interesting PPP

projects can be identified in the two target towns and in other small urban centres.



7 Documents and Reports

Volume I:

Central Bank of Egypt and the Egyptian Social Fund for Development (SFD), “National Strategy for Microfinance,” 2006

Co-operation for Urban Mobility in the Developing World (CODATU) / Transitec, September 2012. ‘Medina Accessibility: a guide for policy makers’

Dokmeci, Vedia, Ufuk Altunbas and Burcin Yazgi, “Revitalisation of the Main Street of a Distinguished Old Neighbourhood in Istanbul”, in European Planning Studies Vol. 15, No. 1, 2007

Donovan Rypkema, Sustainability, Smart Growth and Historic Preservation, presentation to conference of Save Our Heritage Organization, San Diego, 2007

Donovan Rypkema, Caroline Cheong and Randall Mason (2011), Measuring Economic Impacts of Historic Preservation, A Report to the Advisory Council on Historic Preservation

International Conference on Urban heritage in Europe and the Mediterranean: economic and social development (Arles, 22 and 23 April 2010), organized by Alliance of European Cultural Cities (A.V.E.C.)

Kingdom of Morocco, “Development strategies for Morocco’s historic towns,” World Bank Policy Note, Final Report, June 2008

Mason, Randall, “Economics and historic preservation: A guide and review of the literature,” The Brookings Institution Metropolitan Policy Program, 2005

Ozus, Evren and Vedia Dokmeci, “Effects of Revitalization in Historical City Center of Istanbul”, in International Real Estate Review Vol. 8 No. 1: pp. 144 – 159, 2005

Proceedings of the Xth International Conference of the Organization of World Heritage Cities (Quito, 2009), “Historic Cities and their Survival in a Globalized World.”

Randall Mason (2005), Economics and Historic Preservation: A Guide and Review of the Literature, discussion paper prepared for The Brookings Institution Metropolitan Policy Program

Rypkema, Donovan, Caroline Cheong and Randall Mason, Measuring Economic Impacts of Historic Preservation, A Report to the Advisory Council on Historic Preservation, 2011

Tran Huu Tuan and Stale Navrud,, “Capturing the benefits of preserving cultural heritage”, in Journal of Cultural Heritage, vol. 9, p. 326-337, 2008

UNESCO World Heritage Centre, November 2012. ‘Urban Regeneration Project for Historic Cairo. First Report of Activities July 2010-June 2012



UN Habitat, Best Practices on Social Sustainability in Historic Districts, ISBN: 978-92-1-131965-1, 2008

Urban heritage in Europe and the Mediterranean: economic and social development (Arles, 22 and 23 April 2010, organized by Alliance of European Cultural Cities (A.V.E.C.)

World Bank, Cultural Heritage and Development: A Framework for Action in the Middle East and North Africa, June 2001

World Bank, “Implementation Completion Report, (Scl-44020 Scl-44030 Tf-29646) on Two Loans in the Amount of Euro 8.9 Million to the Kingdom of Morocco and the Municipality of Fes for the Fes Medina Rehabilitation Project,” June 2006.

World Bank, “Implementation Completion and Results Report (IBRD 7059-Tun) on a Loan in the Amount of Eur 19.2 Million (US$17.0 Million Equivalent) to the Republic of Tunisia for a Cultural Heritage Project, June 2012.”

Volume II:

See Volume II report for listing of documents and reports consulted



8 Annex 1: Case Studies

The Pre-Operational Study investigated the selected countries and Medinas in detail, including previous

projects to address rehabilitation. Case studies of four past rehabilitation projects in the Medinas of Tunis,

Fez, and Historic Cairo have been selected and presented below. They have been selected because each has

features that constitute lessons that have informed the development of the Medinas 2030 Investment

Programme. To summarize, these lessons are:

Large multi-sectoral grant rehabilitation projects can have a considerable lasting impact on the ground through the creation of physical endowments (Aga Khan Trust activities in Historic Cairo)

The availability of municipal land and its leveraging both for social housing and for profitable real estate development can be key to a project’s financial success as well as its physical achievements. (Al Hafsia Project in Tunis)

A mortgage-backed loan programme for private real estate improvements in medinas can stimulate both considerable housing improvement and encourage better functioning property markets (Oukalas Project in Tunis)

A specialized agency with certain public powers for the rehabilitation of a particular medina can be an effective institutional arrangement for rehabilitation activities and can attract considerable external funding. (Agence de Developpement et Rehabilitation de la medina de Fès)

The context of each country, Medina and project is described and analyzed in detail in the relevant country

reports found in Medinas 2030 Pre-Operation Study Final Report – Volume 2.

8.1 Case 1: Historic Cairo – Aga Khan Trust for Culture Historic Cities Support Program (1997- 2012)

The Aga Khan Trust for Culture Historic Cities Support Program in historic Cairo was a multi-sector, grant-

based rehabilitation program that ran for 15 years and produced a variety of good results in a specific area

(Darb el Ahmar district and surroundings). These included public space improvements, the rehabilitation of

historic buildings and walls, the creation of a large and very successful public park (Al Azhar Park which is

financially sustainable through ticket sales), numerous community development and capacity building

activities (including health and training efforts under the Darb al-Ahmar Community Development

Programme), support for handicraft producers, and the complete rehabilitation of a number of deteriorated

residential structures through a combination of loans and grants.

All of these activities have been financed on a formal grant basis (specific costs are unknown as details of

funding is not available). One very interesting financial feature is that the Al Azhar Park (and an adjacent

parking garage with commercial space, still under construction) represent kinds of physical endowments,

the annual financial proceeds of which are being earmarked for continuing rehabilitation and social

development activities in the area. Under an agreement with the Governorate of Cairo, a portion of these

proceeds will continue to go to a social development NGO recently established by the project called “Al

Muzalla” (the “Umbrella”) that has been registered and can operate throughout Historic Cairo. It is this NGO

that is carrying out most of the continuing social work. Such physical endowment mechanisms are

interesting for Medinas. Grant or even loan financing can create the physical endowment (and such

endowments can include more commercial activities such as hotels and restaurants and cafes), and then the

earmarked revenues from the endowment’s activities can provide a source of sustainable financing for

additional needed rehabilitation measures in a particular Medina.



8.2 Case 2: Tunis – El Hafsia Project

The Hafsia quarter project was an initiative to rehabilitate a largely derelict area in the Medina of Tunis. The

project's goals included providing housing for the poor, greatly raising the standard of living of the

inhabitants, and recapturing the diversity and life of an urban center. By maintaining the traditional urban

fabric of the Medina, this project recreated the lost physical continuity of the area, thus enabling social and

cultural continuity. An extremely important aspect to the project was that it promoted the conservation and

progression of tradition through the construction of new buildings rather than the adaptation of old

structures. The project spanned many years; Phase I was in effect from 1973-77 and Phase II from 1982-86,

with work continuing through the 1990s. Hafsia Phase I won an Aga Khan Award for Architecture in 1983, as

did Hafsia Phase II in 1995.

The first phase in the rehabilitation of Hafsia covered approximately 3 hectares of a larger, mainly

demolished area in the center and east of the Medina and included considerable vacant land. The second

phase addressed the surrounding 10 hectares, 22 percent of which had buildings in good condition, 38

percent had structures to be rehabilitated, 12 percent had structures to be demolished, and 28 percent was

open land. The high percentage (40 percent) of land that was free for redevelopment was a crucial factor in

the success of the project.

In 1973 the Ministry for Public Works proposed that a residential and urban rehabilitation plan for the Hafsia

be organized. This became the first phase of the area's rehabilitation, commissioned by the ASM-Tunis with

help from UNESCO, acting for the Municipality of Tunis. The project was completed in 1977 and during 1981-

82 a new proposal was conceived by ASM-Tunis under the auspices of the Third Urban Development Project

of the Ministry for Housing, with technical and financial assistance from the World Bank. Again this was in

close coordination with the Municipality of Tunis, this time through the ARRU.

The two phases of the Hafsia project created over 300 housing units (houses, courtyard houses, and

apartments), aimed both at low-income residents and for more wealthy families (the latter built on a for-

profit basis.) A number of model designs were used to ensure a diversity of styles and a human scale, and

traditional architectural vocabularies were employed to ensure integration with the surrounding townscape.

Also created were a new covered souq (Souq el Hout), roads and parking, separated pedestrian routes,

public baths, a daycare centre, a health centre, offices, three hotels, and commercial space.

It is important to note that large proportions of the land for the Hafsia Project were owned by the

Municipality of Tunis as a result of expropriations in the 1930s for renewal projects that never materialized.

This fact, and the leveraging of this municipal land both for social housing and for profitable real estate

development, was key to the financial success of the project as well as its physical achievements.

8.3 Case 3: Tunis – The Oukalas Project

The Oukalas Project was initiated in 1991-92 and ran until the year 2000. The project promoter (maitre

d’ouvrage) was the municipality of Tunis. There were a number of affiliates to the project, including ASM-

Tunis, ARRU, and various directorates within the municipality. Clear information about this project and its

components has not been easy to uncover.

The project was multi-sectoral and was based upon a well thought-out strategy of intervention to tackle the

problem of degraded old commercial buildings, the ‘oukalas’, within the Medina of Tunis. Socio-economic,

building, and property studies were carried out. A survey inventoried 256 buildings threatened by collapse in

which 1,296 families lived and needed evacuation. There were also a further 404 oukalas that could be

repaired, housing an additional 1,600 families. The main components addressing these oukalas were (1) re-

lodging of 1,300 families in three locations outside the Medina (2) the rehabilitation of 30 publicly-owned

buildings and 373 privately-owned buildings (3) the reconstruction of 13 buildings of historic merit for reuse

as social services. The total investment cost of the project was estimated at TD 71 million (USD 67 million at

the time), with funding derived from both public (municipal, national, and international) and private sources.



Of considerable interest in this project are the mechanisms of private financing it employed. As of 1997,

some 230 mortgage-backed long term loans under slightly better than prevailing rates had been made to

property owners in the medina to rehabilitate and improve their buildings, based on detailed design briefs

prepared by ASM-Tunis. It was the responsibility of owners to provide the necessary documentation

including title deeds to their properties. The loan component was administered by the municipality and was

financed by a credit of USD 15 million made available by the Arab Fund for Economic and Social

Development (Kuwait). Repayment is said to be good. Not only were a number of buildings improved in the

Medina, but owners had to make considerable efforts to clear up property disputes and confusions, thus

bringing into the formal market a number of properties.

It should be added that the contribution of the Arab Fund for Economic and Social Development was

considerable, according to AidData.32 This source describes “Al-Wakael Project (Phase-IV),” with a value of

KD 5,2 million (today roughly Euro 15 million). Components included (1) expropriation and demolition of 39

buildings, (2) rehousing of families in 132 especially built units in Al-Mourouj 2 (a public housing estate far

outside the medina) and another 43 units in the “Old City”, (3) major rehabilitation of 167 buildings as well as

shopfronts and walkways and other associated services, and housing loans to the owners of “about” 124

buildings for improvements, and (4) studies and supervision.

8.4 Case 4: Morocco – Agence de Developpement et Rehabilitation de la Medina de Fès

Area-specific “development agencies” are a new kind of development institution in Morocco, and one that

many observers think can be efficient, financially self-supporting, and dynamic. The prime example of this

kind of agency concerned with Medina rehabilitation is the ADER-Fès, created in 1998. This agency is

responsible for the Medina of Fès as its name implies, has a board of directors grouping a number of

ministries, and can borrow funds with the approval of the Ministry of Interior. ADER-Fès has already carried

out a number of rehabilitation projects using a variety of funding sources, including government grants,

loans from the World Bank, and most recently a large grant from the Millennium Challenge Corporation.

ADER-Fès would like to be a more active agent for rehabilitation, and is interested in creating a property

development arm.

ADER-Fès is considered by many observers to be a model institution for Medina rehabilitation, especially

since it can mix grant and loan monies and carry out both profitable and non-profitable projects. However,

most of the kinds of projects it has pursued to date are non-profitable improvements in public space and

monuments.

32 http://www.aiddata.org/content/Project?id=2429300; It was difficult to find documentation on the Arab Fund for Economic

and Social Development’s contribution to the Oukalas Project, either in Tunisia or through the internet. Only this site provided

any details.

http://www.aiddata.org/content/Project?id=2429300



9 Annex 2: Projects Identified

An initial project identification was undertaken by the study in the countries and Medinas covered. The general observation was that there are relatively few

projects for Medinas rehabilitation already in a mature stage of project preparation. The following projects were identified, which are described in more detail in

the relevant Sections of Volume II Medinas 2030 Country Reports.

9.1 Morocco Project Pipeline

No. City Subject Promoter / Maitre d'Ouvrage Sovereign

Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

Salé Plan for the Protection of the Medina of Salé

M-1 Salé

Relocation of 900 households and rehabilitation of 260

houses and purchase of commercial properties

(fonduks) by Commune Commune / Min Interior Yes t.b.d. 1 1 Yes No

M-2 Salé

Restoration of the medina walls and establishment of

new museums Commune / Min Interior Yes t.b.d. 1 1 Yes No

M-3 Salé Preparation of guidebook and signage Commune / Min Interior Yes t.b.d. 1 1 Yes No

M-4 Salé

Creation of handicraft complex in 3 fondouqs belonging

to the Habous Commune / Min Awqaf Yes t.b.d. 1 2 Yes Maybe

Essaouira

Urban Projects for the Extension and Development of

Essaouira and Its Historic Center 78.7 million

M-5 Essaouira Rehabilitation public spaces and sites of historic value new agency (pouvoir publique) Yes 10.9 million 4 1 Yes No

M-6 Essaouira Rehabilitation of the Mellah new agency (pouvoir publique) Yes 14.5 million* 4 2 Yes No

M-7 Essaouira Conversion of industrial zone new agency (pouvoir publique) Yes 24.5 million* 4 8 Yes Maybe

M-8 Essaouira Creation of a new urban center at Douar Laarab new agency (pouvoir publique) Yes 28.8 million* 2 7 Yes Maybe

Casablanca

Project for the Rehabilitation of the Medina of

Casablanca

Comitee de Pilotage is completing current projects and

is preparing programme to start in 2014

Tétouan

Programme for Protection and Rehabilitation of

Historic Tetouan**

66.9 million

plus kasbah




Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

M-9 Tétouan

Infrastructure improvements (water, sewerage,

electricity, telcom and skundo network) Commune / Min Interior Yes 6.6 million 3 1 Yes No

M-10 Tétouan

Improving public spaces, roads, tourist circuits,

illumination, and cemeteries and one thematic museum Commune / Min Interior Yes 16.7 million 2 2 Yes No

M-11 Tétouan

Historic buildings (fondouks) improvement and

conversion, restoration of schools and religious

buildings, and rehab of national theatre Commune / Min Interior Yes 37.3 million 3 4 Yes Maybe

M-12 Tétouan

Kasbah rehabilitation, revitalization, and reuse for hotel

and restaurants Commune / Min Interior / Army No t.b.d. 1 9 Yes Yes

M-13 Tétouan Reorganization of commercial activities Commune / Min Interior Yes 6.3 million 3 1 Yes No

Meknès Rehabilitation of Medina of Meknes

63.9 public;

48.4

private,

total 112.3

M-14 Meknès Strategic actions: expropriation of 278 parcels

New state-owned company (to

be created by decree) Yes 8.4 million 4 1 Yes No

M-15 Meknès

Habitat: relocation of 600 households outside medina,

surveys, innovative middle class housing, upgrading of

medina houses


be created by decree) Yes 22 million 4 4 Yes No

M-16 Meknès

Artisanat support and outlets, reconstruction of 3

fondouks for artisanat, relocation of incompatible

workshops, improve shopfronts, and new spaces for

local products



M-17 Meknès

Tourism promotion: create 200 rooms in 15 masions

d'hotes, create 50 rooms in chambres d'hotes, create a

visitors centre, create thematic circuits, create 3

international class restaurants


be created by decree) Yes 17.2 million 4 8 Yes Yes

M-18 Meknès

Cultural interventions: historic monument and walls

conservation



M-19 Meknès

Public spaces and its equipment, includes police posts

and 1000 parking spaces


be created by decree) Perhaps 26.8 mllion 5 2 No No




Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

M-20 Meknès Tizimi neighborhood upgrading

*Excludes land/property acquisition costs and decontamination costs where applicable

**Some elements already underway, kasbah costs not included

t.b.d. to be determined

9.2 Tunisia Project Pipeline

No. City Subject Promoter / Maitre

d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

T-1 Tunis

Rehabilitation and enhancement of a complementary tourist circuit

from the Zitouna to Sidi Ibrahim 1600 meters

Municipality /Min

Interior with ASM Yes 1.0 million 4 1 Yes No

T-2 Tunis Urban redevelopment of the quarter Mdaq al Halfa :”La Kherba" Municipality /Min

Interior with ASM Yes t.b.d. 2 9 Yes No

T-3 Tunis

Medina properties improvement mortgage loan program modeled

after oukalas project with FADES funds*

Local bank with

ASM and

Municipality Maybe 12 million 2 8 Yes No

T-4 Tunis

Credit for purchase of housing units following FOPROLOS/Djedid

loan programme* Bank de l'Habitat

and ARRU Maybe t.b.d. 2 8 Yes No

T-5 Kairouan

Relocate the museum of Islamic Art from Bourgiba Palace to public

land near the Great Mosque INP/Municipality Yes t.b.d. 1 1 Yes No

T-6 Kairouan Renovation of an old hotel and surrounding central souks Municipality with

ASM and ARRU Yes t.b.d. 1 3 Yes No

T-7 Kairouan

Transform some large mansions into hotels de charme (example: Dar

al Mourabit)

Municipality/Private

sector Yes t.b.d. 1 8 Yes Yes

T-8 Sousse Improve wastewater effluent system, reduce contamination Municipality/W&WW

authority Yes t.b.d. 2 1 Yes No




d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

T-9 Sousse Completion of renovation of caravanserai and souk des forgerons Municipality / Min

Interior / ARRU Yes t.b.d. 3 1 Yes No

T-10 Sousse Renovation of the Place de la Bourse Municipality / Min

Interior / ARRU Yes t.b.d. 1 1 Yes No

T-11 Sousse

Loukala ( galerie, cafe, theatre, cultural centre, restaurant) in old

renovated oukala. Euro 160,000 invested, completion loan/grant

needed

Société commerciale

Sacomart) –

L’Alternative

Culturelle No 90,000 9 8 Yes No

T-12 Sousse

Atelier El Hajj revitalisation (last traditional weaver in Sousse);Euro

20,000 already invested Le Tisserand No Euro 25,000 9 9 No No

T-13 Sousse

Museum El Kobba (interwar period) and old coffee house; Euro

300,000 already invested Commune of Sousse No Euro 150,000 9 8 No No


*could be expanded to include all target medinas in Tunisia

FADES Fonds Arabe de Développement Economique et Sociale

9.3 Egypt Project Pipeline

No Subject Promoter /

Maitre

d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturit

y (1 to

10)

Financia

l Return

(1 to 10)

Supporting

TA

PPP

Element

E-1 Darb al Labbanah mixed use area development with three small hotels, adaptive

reuse, etc.

Egyptian

company Gaia

with MSA

No 8.75 million

(phase one)

5 9 Yes Yes

E-2 Bab al Azab (Citadel) redevelopment -- Creation of new entrance to Citadel

complex, monument conservation, exhibition space, handicraft outlets

MSA Yes 3.2 miilion 1 3 Yes Maybe

E-3 North Gamaliyya -- Hotel Qaytbay (reuse as 50 room international hotel) Ministry of Awqaf

with private

developer

Yes 17.5 million 2 9 Yes Yes



No Subject Promoter /

Maitre

d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturit

y (1 to

10)

Financia

l Return

(1 to 10)

Supporting

TA

PPP

Element

E-4 North Gamaliyya -- Hotel Oda Basha (reuse as 80 room international hotel) MSA with private

developer

Yes 9.4 million 2 9 Yes Yes

E-5 Public space and tourist circuit improvements from Islamic Museum by Bab al

Zuwayla to Azhar Park plus adaptive reuse of tent makers souk

Ministry of

Culture/MSA

Yes t.b.d. 1 3 Yes Maybe

E-6 Public space and tourist circuit improvements on Bab al-Wazir St. street leading

to the Citadel Ministry of

Culture/MSA

Yes t.b.d. 1 1 Yes No

E-7 Micro credit for housing improvement Social Fund for

Development

Yes t.b.d. 1 8 Yes No

E-8 E-8 Micro-credit for small businesses and support for handicrafts (vocational

training and marketing support)

Muzalla NGO and

Aga Khan First

Micro Finance

No t.b.d. 1 4 Yes No

9.4 Jordan Project Pipeline


d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return (1

to 10)

Supporting

TA

PPP

Element

J-1 Karak Private hotel in Karak

Private developer

(Jordanian company) No 2.4 million 9 10 Yes No

J-2 Karak Parking schemes outside old town and shuttle buses

Municipality / MOTA or

MOMA Yes t.b.d. 1 1 No No

J-3 Karak Support for women's handicraft collectives in Karak

national NGO with 27

collectives Maybe t.b.d. 1 3 Yes No

J-4 Amman Wadi Amman Regeneration Project

Greater Amman

Municipality Maybe

65 million

minimum 2 2 Yes No


MOTA Ministry of Tourism and Antiquities

MOMA Ministry of Municipal Affairs



9.5 Lebanon Project Pipeline

No. City Subject Promoter /

Maitre d'Ouvrage

Sovereign

Participation

Estimated

Investment

(Eur)

Maturity

(1 to 10)

Financial

Return

(1 to 10)

Supporting

TA

PPP

Element

L-1 Tripoli Streetscape and public space improvements in central and southern souks Municipality / CDR Yes t.b.d. 1 1 Yes No

L-2 Tripoli Urban Upgrading of Tabbane Area Municipality / CDR Yes t.b.d. 1 1 Yes No

L-3 Al Mina Redesign and improvement of the seafront and corniche Municipality / CDR Yes 5 million 2 2 Yes No

L-4 Al Mina Rehabilitation and reuse of the historic seafront city saray Municipality / CDR Yes t.b.d. 1 2 Yes Maybe

L-5 Al Mina Improvement of the old souk (bazaar) Municipality / CDR Yes t.b.d. 1 1 Yes No

L-6 Sidon Shara al Shakri and related street improvements Municipality / CDR Yes 5 million 1 1 Yes No

L-7 Sidon Traffic and parking improvements Municipality / CDR Yes 5 million 1 2 Yes No

L-8 Sidon Rehabilitating old homes in the medina Municipality / CDR Yes 16 million 1 2 Yes No

L-9 Sidon Solar energy street lighting Municipality / CDR Yes 3 million 1 6 Yes Maybe

L-10 Tyre Relocation of government offices and rehabilitation of the city Saray Municipality / CDR Yes 2 million 3 1 Yes No

L-11 Tyre Conversion of commercial port into a private boat basin Municipality / CDR Yes t.b.d. 1 6 Yes Maybe

L-12 Tyre Peripheral parking and shuttle buses Municipality / CDR Yes t.b.d. 1 3 Yes Maybe

L-13 Tyre Solar energy street lighting Municipality / CDR Yes t.b.d. 1 6 Yes Maybe

L-14 Tyre Historic building façade treatment Municipality / CDR Yes t.b.d. 1 1 Yes No

L-15 Baalbek Old souk (bazaar) rehabilitation Municipality / CDR Yes t.b.d. 1 1 Yes No

L-16 Baalbek Ras al Ain Boulevard rehabilitation Municipality / CDR Yes t.b.d. 1 1 Yes No

L-17 Baalbek Gouraud Barracks rehabilitation and reuse Municipality / CDR Yes t.b.d. 1 4 Yes Maybe

L-18 Baalbek Rehabilitation and reuse of old mud structures Municipality / CDR Yes t.b.d. 1 2 Yes No

CDR Council for Development and Reconstruction



RebelGroup Arup

Wijnhaven 23 13 Fitzroy Street

3011 WH Rotterdam London W1T 4BQ

The Netherlands United Kingdom

www.rebelgroup.com www.arup.com