The Polish Development Fund starts new local government investments under the Package for Medium Sized Cities Program
The Polish Development Fund starts new local government investments under the Package for Medium Sized Cities Program

The Polish Development Fund starts new local government investments under the Package for Medium Sized Cities Program

On January 11, 2018, PFR Fundusz Inwestycji Samorządowych, whose mission is to provide Capital for the Development of Local Governments, signed investment agreements. The first agreement was concluded with the municipalities of Nowy Sącz, Nawojowa, Stary Sącz, Kamionka Wielka, and Korzenna, by means of which the Polish Development Fund will invest in the Sądeckie Wodociągi company. The second investment also covers the extension of the water and sewage infrastructure in Limanowa, where the fund will become a shareholder of the Department of Public Utilities and Housing. The total value of both investments amounts to PLN 50 million.

"One of the fundamental goals of the social and economic policy of our government is to equalize the development opportunities of individual regions of the country and to end the harmful and shameful division of Poland into Poland "A", "B" and "C". Outside agglomerations, in small and medium sized Polish cities, there is a social deficiency and infrastructure deficit of investments improving the quality of life of residents. Poland must show its activity in removing differences, sometimes even civilizational differences, between large and smaller urban centers. The program initiated by the Ministry of Development in cooperation with the Polish Development Fund and local governments is a great incentive for the implementation of a number of investments expected by local communities that will improve the quality of life of residents of our small homelands,"  says the Prime Minister, Mateusz  Morawiecki.

"The Polish Development Fund is implementing a Package for Medium Sized Cities Program that is a part of the so- called Morawiecki Plan and aims to speed up investment in modern infrastructure of Polish local governments. Our goal is to provide Capital for Local Governments as a key element of the Polish Development Fund's offer for local government units that want to finance investments. I am convinced that our offer will contribute to a significant increase in investments of Polish local governments, in particular in the area of water and sewage infrastructure, heating systems and revitalization," said Paweł Borys, President of the Polish Development Fund.

The Polish Development Fund (through Fundusz Inwestycji Samorządowych) will invest in Sądeckie Wodociągi and the Departments of Public Utilities and Housing in Limanowa comprising minority blocks of shares in these companies. Local governments intend to allocate the acquired funds  to the implementation of strategic investments for their residents. The investment horizon of the Polish Development Fund investment is for a maximum of 20 years.

"Today's ceremony shows that pre-investment meetings with PFR experts have brought their first results, and the instrument prepared as part of the Package for Medium Sized Cities is needed. Two cities have already decided to implement projects in this model. This is a pioneering decision that will bring benefits to each party, as well as confirmation that PFR is a safe source for funding local public investments," said Jerzy Kwieciński, Minister of Investment and Development.

What is more, by January 11, 2018, the Polish Development Fund had already concluded over 20 cooperation and confidentiality agreements with local government units that are considering cooperation with entities such as the Polish Development Fund.

"The Polish Development Fund's offer is addressed to local government units that, due to the limited access to EU assistance funds, have no possibility of further indebtedness. Our research proves that the value of investment needs of local governments for which they do not have the provided funding exceeds their ability to indebt more than three times. In such cases, the offer of the Polish Development Fund and the financing  instrument, namely the Public-Private Partnership, is a good instrument for financing public services and a  manner to implement capital intensive investments that do not generate revenue. We are satisfied to conclude today the first agreements under our program. I believe that other local governments will also benefit from our offer," said Bartłomiej Pawlak, Member of the Management Board of the Polish Development Fund in charge of local government investments. 

"The Package for medium sized cities is a strategic project that helps smaller cities compete with large ones in acquiring external funds, using innovative sources of funding and attracting private investors. After the first months, we can observe that this form of support effectively mobilizes them to apply for funds and affects their development, and thus the local and national economy," said Adam Hamryszczak, Undersecretary of State in the Ministry of Development.

The Polish Development Fund is a Partner of the Ministry of Development in implementation of the "Package for medium sized cities" program. The role of the Polish Development Fund is to provide consultation to local government units regarding the opportunities of financing their investment needs. Under the call process, 150 local governments have applied for the Polish Development Fund. These are local governments that seek investment opportunities, are unable to obtain grants, and do not want or cannot get into debt for various reasons. Most investment needs were from the area of road and transport infrastructure (i.e.: roads, streets, by pass- routes, junctions, bridges, railway stations, railway lines, rolling stock, interchanges) and the area of cubature (museums, knowledge acquisition centers, schools, kindergartens). The total value of investment needs exceeds PLN 5.5 billion.
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