The European Investment Bank (EIB) and Bank Gospodarstwa Krajowego (BGK), the Polish development bank, have signed an agreement to set up an investment platform supporting social and affordable housing projects in different municipalities across Poland. Contributing to social inclusion, this platform, backed by the Juncker Commission’s Investment Plan for Europe, will roll out a programme in an area where much investment is needed.
The intention of this agreement is to support social and affordable housing investments for a total cost of some PLN 2.1bn (around EUR 496m) until 2021. The projects to be financed under the investment platform concern the construction or retrofitting of social and/or affordable housing units for rental, as well as the construction of regulated affordable rent-to-buy housing. In addition, the construction of any associated infrastructure such as roads, drainage, utilities and recreational amenities specifically designed to meet the needs of the housing units of the relevant investment will also benefit from this financing. The municipal authorities and registered social and affordable housing providers, such as non-profit housing enterprises (TBS), will be the eligible beneficiaries of this investment platform.
EIB Vice-President Vazil Hudák, responsible for the Bank’s activities in Poland, said: “Poland needs significant investment in social and affordable housing in the coming years and the availability of public funding and public programmes in this area is limited. We are therefore glad that the EIB and our long-time partner BGK will join forces to help close the financing gap by establishing this investment platform. We believe it will help the municipalities with the revitalisation of urban areas and efficient urban development. Equally important is that this joint initiative will reduce social exclusion by making housing more accessible. The Investment Plan for Europe also means investing more in social infrastructure and supporting the solidarity economy.”
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "The European Fund for Strategic Investments was designed as a dynamic tool that can work with investment platforms to channel investment to support a range of projects. Today's agreement is an excellent demonstration of the EFSI being used in a dynamic manner in order to support investment where it is needed most to contribute to tangible improvements in people's lives."
Beata Daszyńska-Muzyczka, President of the Management Board of BGK, said: “BGK, as a bank supporting the social and economic development of the Polish economy, has a special role to play in financing social and affordable housing, both within governmental programmes and as part of its own activity. As a state development bank we can offer the long maturities and preferential rates needed for this kind of investment. This has enabled us to finance a total of more than 100 000 housing units available to less privileged Poles. The EIB was already an important partner in this activity, providing funding for the governmental programme. By signing today’s investment platform agreement we will be able to extend the existing offer for municipalities and social housing associations. We are proud that this is part of the Investment Plan for Europe and the first investment platform in Poland. It confirms the important role of BGK in implementing this initiative. The development of social housing is part of the “Mieszkanie+ programme”, which is being implemented in close cooperation with our subsidiary company BGK Nieruchomości”
This cooperation will be based on three main pillars. The first pillar – the National Programme for Support of Social Housing – already exists, and receives EIB support in the form of partial funding for projects totalling PLN 800m (around EUR 190m). Complementary lending aimed at the largest projects is to be provided through individual loans for an amount up to a total of PLN 400m (around EUR 95m) from the EIB. These individual loans will be covered by the European Fund for Strategic Investments (EFSI), a central element of the Investment Plan for Europe. BGK will complement EIB lending in many cases by using its own funds. Finally, the last pillar, also totalling PLN 400m, consists of intermediated loans – projects will be financed by BGK, partially or entirely based on EIB funding.
Cooperating with BGK for this joint financial product will enable the EIB to finance investments from smaller promoters. Both institutions will carry out joint due diligence and appraisal of the projects, and may also undertake joint market surveys and marketing actions. Within the investment platform, projects may also benefit from the support of the European Investment Advisory Hub, a 360-degree advisory and technical assistance services offer established under the Investment Plan for Europe.