A consortium led by 10 Greater Manchester councils has been chosen to manage a £350m regeneration fund to lend to developers in the north-west.

The Evergreen Consortium, which includes the Greater Manchester Pension Fund and CB Richard Ellis, aims to create a fund of up to £350m to invest in the Manchester region.

It will receive £60m of public sector money and is in advanced talks with pension funds and a bank to raise further equity. The EU’s European Regional Development Fund is providing £20m and the Northwest Regional Development Agency (NWDA) is providing £10m.

Other public sector bodies are to match this with a further £30m. Over the next 10 years, the consortium estimates that the fund will have the potential to lend up to £350m overall.

It wants to use the cash to offer loans to developers, and recycle the profits back into the fund.

Against the backdrop of spending cuts, the public and private regeneration sectors are having to innovate to make the most of small tranches of public money.

Secretary of state for Communities and Local Government Eric Pickles said: “This is proof that when left to get on with it local areas will and do work together for the common good.

“This is a great example of the innovation that can be unleashed when councils and business join forces. I want to see more of this: more civic entrepreneurship, more working across old boundaries and above all, more creative use by the public sector of scarce resources.”

The fund is split into two pools: one for developers in Greater Manchester and another for Cheshire, Cumbria, and Lancashire.

Under EU rules, most of the seed money must be fully invested by the end of 2015, which means the consortium is under pressure to spend. Its first round of financing will close by March 2011.

This news will be welcome among developers in the north-west, where the NWDA pulled the plug on £52m of regeneration spending earlier this week.

Sir Richard Leese, leader of Manchester City Council, said: “When public resources are extremely limited, it is important that we continue to deliver as many regeneration priorities as possible by unlocking new ways of finding investment.”

Sarah Whitney, head of government and infrastructure at CB Richard Ellis, said: “The consortium’s proposals are the result of a uniquely collaborative approach which has meant that more than forty expressions of support were received prior to the submission of the proposals to the European Investment Bank, from local authorities, developers and other public sector bodies, many of which will be beneficiaries of the funding that Evergreen secures.

“This level of support, which is unparalleled in any other form of local authority investment vehicle, should ensure that the Fund has the best possible start in life.”

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