Government Polish Order Fund: Strategic Investment Programme

Bank Gospodarstwa Krajowego is the operator of the Government Polish Order Fund: Strategic Investment Programme, which is designed to support the reconstruction of the economy after the COVID-19 pandemic.

The Strategic Investment Programme is addressed to local government units and their associations, whose budgets have been significantly affected by the pandemic. BGK’s analysis* indicated that in 2020 (compared to 2019), income from PIT declined 1.9% and operating surplus fell 11.2%. The result was a 4.2% reduction of capital expenditures triggering cuts in plans for new projects. They were limited to essential projects, i.e. those that cannot be postponed any longer. The Government Polish Order Fund: Strategic Investment Programme in the next few years is intended to help local governments get back on track with their public investments. The Programme provides for non-repayable co-financing of projects, covering up to 95% of their value. The minimum own contribution required is 5% of the project value (depending on its priority area specified by the local government unit in its application for co-financing).

The Polish Order is forward looking and long term. Implementation of the planned strategic investments will raise the productivity level of the entire Polish economy.

Objectives of the Strategic Investment Programme:

  1. stimulating investment activity of local government units
  2. enhancing local entrepreneurship
  3. improving the living conditions of citizens
  4. creating new jobs
  5. supporting sustainable development
  6. effectively engaging the financial sector

* Data source: Report “Financial condition of local government units after four quarters of 2020,” Research and Analyses Bureau, BGK, April 2021.

The programme covers more than 30 areas of the economy, including investments in water and sewerage infrastructure, modernisation of heat sources to zero-emission technologies, waste management, as well as provides for social investments – nurseries, kindergartens and bike paths. The common point of these investments is sustainable socio-economic development, which is an element of BGK’s mission.

The programme is implemented through credit commitments granted by Bank Gospodarstwa Krajowego. The first preliminary credit commitment will enable a local government unit to open a tendering process and select a contractor. The second one – an investment credit commitment, will be issued after the tendering procedure is finished and will form the basis for signing an agreement with the contractor and disbursing funds under the co-financing facility once the entire project or its individual stages are completed. The payment cycle depends on the duration of the project. The investment commitment is therefore equivalent to a promise to pay the amount for which it has been made.

In late 2021, the Commission at the Office of the Prime Minister evaluated the applications submitted in the First Pilot Edition of the Government Polish Order Fund: Strategic Investment Programme. Based on the recommendation of the Commission, the Prime Minister approved co-financing of 4,040 investment projects worth PLN 23.9 billion. The programme attracted much interest: in the first pilot call for applications local authorities filed 7,998 applications for co-financing worth PLN 93.3 billion.

On 28 December 2021, two new calls for applications were held under the Government Polish Order Fund: Strategic Investment Programme, including the first thematic call – dedicated to municipalities where former state farms were located. The end date for both of these editions was set for 11 March 2022.

It is planned that in 2022 further calls will be made under the Government Polish Order Fund: Strategic Investment Programme.