The European Investment Bank (EIB) will provide a SEK1.8bn (€200m) loan for small and medium-sized infrastructure development projects in the Vasteras city of Sweden.
Under the four-year investment programme from now to 2017, the EIB loan will be used for energy, mobility and housing schemes, as well as schools, sports facilities, water and waste management.
Plans include the reconstruction or renovation of public buildings and affordable housing, replacement of windows and energy-efficiency measures, refurbishment of streets and modernisation of transport infrastructure, amongst others.
EIB vice-president Jonathan Taylor said: "Urban renewal and regeneration in the pursuit of more sustainable and competitive cities is a priority strategic objective of the EIB.
"We therefore particularly welcome this agreement with the Municipality of Västerås, as it will enable us to finance investments to cater for the needs of its growing population and promote long-term economic growth in the municipality and the region as a whole."
Vasteras mayor Ulla Persson said: "The loan will help to secure the financing of the Västerås Group's investments over the next few years.
"This is also a seal of approval since it is the EU's bank that has provided the loan."
EIB is providing the second loan to Vasteras, following the previous provision for the construction of a biomass-fired boiler at a combined heat and power plant in 2000.
Image: An ariel view of the Vasteras city in Sweden. Photo: courtesy of European Investment Bank.