Addressing a conference in Swansea, Mr Davies said that award of a second round of European funding for 2007-2013 will help drive through an investment programme approaching£3bn to complete the economic transformation of the most disadvantaged parts of Wales.
The regeneration of SA1 Swansea Waterfront is helping reorient the city to face the sea and transforming the dockland area, the Minister told the conference, held in the Liberty Stadium, Swansea.
Projects under way in all parts of Wales played a major role in improving quality of life and delivering economic prosperity, he told delegates.
'Just seven years after devolution of power to Wales, the new Government of Wales Act is equipping the Welsh Assembly Government with enhanced powers to deliver these ambitions.
'We are delivering a wide range of regeneration activities - urban and rural renewal, land reclamation, environmental improvements to sites and properties, as well as major programmes such as that for the Heads of the Valleys and the coastal development strategy.'
The regeneration programme reflects the Assembly Government's commitment to ensure sustainability is a key feature of future development for all communities, he said.
'Community safety, a quality urban environment, good housing and a sound economic and social infrastructure all have a role to play in creating attractive, sustainable communities.'
Regeneration work assists rural as well as urban areas, with projects such as the Cardigan and South Ceredigion Regeneration Plan and the Llanidloes Regeneration Plan stressing the opportunities for high tech and high value employment, Mr Davies said.