In addition to the PLN 770 billion allocated from European funds, Polish companies, local governments and government institutions will also be able to benefit from repayable support under a new EU instrument – the InvestEU Programme. The European Commission forecasts that this instrument will support investment projects worth around €400 billion across the European Union.
The InvestEU Fund, which is the financial pillar of the programme, will be used to finance, among other things, loans, guarantees and the redemption of long-term bonds. The goal is to boost investment throughout the European Union. The beneficiaries will include local governments, small and medium-sized companies, state-owned companies and the government sector.
The Fund is based on financial guarantees. The European Commission, European Investment Bank (EIB) and national partners (in Poland this will be Bank Gospodarstwa Krajowego) have secured amounts in their budgets sufficient to generate €32.5 billion of guarantees. These guarantees will enable the EIB and national partners to provide preferential loans or finance riskier investment projects, for instance. The financing granted will be repayable.
According to EU estimates, for each euro pledged in guarantees, €12 worth of investment will be generated. This means that the value of the projects supported by the guarantees will be around €400 billion.
The InvestEU Fund is based on the Regulation of the European Parliament and of the Council of 24 March 2021.
To be eligible for support, investment projects must involve at least one of the four following areas:
- sustainable infrastructure (including transport, energy, digital connectivity, waste);
- research, innovation and digitisation (including transfer of research results, implementation of innovative solutions, support for the scaling up of innovative companies);
- small and medium-sized enterprises (including preferential repayable financing for SMEs and small mid-cap companies);
- social investment and skills (including education, training, social infrastructure, social innovation, health and long-term care).
Moreover, the Fund can be used to support improvement in the thermal performance of buildings and the construction of affordable social housing.
The Regulation also provides for several exceptions. The following investment projects will not be eligible for financing under the Fund:
- landfills (unless there is no alternative or landfilling serves the purpose of recycling);
- solid fossil fuel mining and processing (unless it prevents pollution and reduces greenhouse gas emissions);
- waste incineration plants (except for hazardous waste incineration plants and investments to increase energy efficiency).
Entities from all European countries will be able to benefit from the InvestEU Fund. In total, 75% of the guarantees under the Fund will be distributed by the European Investment Bank Group (European Investment Bank and European Investment Fund). Local governments, state-owned companies and the government sector, among others, will apply to the EIB. The Bank will assess their investment projects and decide whether to support them.
The remaining 25% of InvestEU Fund guarantees will be distributed by partners in individual countries. In Poland, Bank Gospodarstwa Krajowego intends to become such a partner. It is currently negotiating with the European Commission the amount of guarantees it will have at its disposal and the terms on which it will support investments.
When will the programme start?
The detailed parameters of the support to be made available under the Fund are currently being worked out at the EU level. The Polish institutions involved in its implementation (Ministry of Funds and Regional Policy, Bank Gospodarstwa Krajowego, National Contact Point for Financial Instruments of the European Union Programmes) are also preparing for the new programme. The money is expected to be released in the second half of 2021.
Polish experience
The InvestEU Fund is the successor to the Investment Plan for Europe (popularly known as the Juncker Plan). Poland will benefit from the experience it gained in implementing the Plan. That instrument operated from 2015 to 2020, and Poland managed to use it very efficiently compared to other EU countries. Polish investments worth PLN 80 billion received funding under the Plan, and the support amounted to around PLN 20 billion. Poland was ranked sixth when multi-country operations are taken into account, and fifth at the national level.
The projects funded in Poland under the Investment Plan for Europe included programmes implemented by the Poznań University of Medical Sciences (the extension of university hospitals along with the construction of a medical simulation centre and a new Faculty of Pharmacy building), the Tauron Polska Energia project aimed at developing transmission systems, the construction of 1 300 affordable rental properties in Poznań and investment support for almost 50 000 SMEs.
The view of policy-makers
“The InvestEU programme makes it possible to obtain support for investments with a higher risk profile that could not count on repayable financing from financial institutions. In addition, support under the InvestEU Fund is meant to mobilise private and public resources for investment projects of strategic importance to the EU economy. InvestEU will supplement our budget resources and the EU funds we receive under the cohesion policy and the National Recovery Plan. As with the Investment Plan for Europe, the Ministry of Funds and Regional Policy will help Polish entities apply for this money,” says the Minister of Finance, Funds and Regional Policy, Tadeusz Kościński.
According to Valdis Dombrovskis, executive vice-president of the European Commission for An Economy that Works for People: “The InvestEU programme will be a key part of the European response to the pandemic and will help Poland recover from a deep social and economic crisis. Thanks to private participation and to EU guarantees that eliminate project risks, the programme will strengthen innovation and job creation in line with the European Union’s priority objective of generating economic growth in the short to medium term. The InvestEU programme is structured to provide long-term funding and thus increase the scale of investment in Poland. It will help to boost competitiveness and productivity while improving cohesion and inclusion across Europe. There is no reconstruction without investment. And this is about investing in the future.”
“The InvestEU programme builds on the success of the Investment Plan for Europe, which mobilised over €546 billion of investment in Europe between 2015 and 2020. By supporting competitiveness, innovation and versatility, the new programme aims to strengthen the economic foundations of the Member States. Potential beneficiaries of the InvestEU Fund include both public and private entities for which traditional forms of funding are often too expensive. Guarantees from the EU budget, amounting to €26.2 billion, aim to unlock this funding. The EIB Group actively supports the implementation of the programme in individual Member States, including Poland,” notes Professor Teresa Czerwińska, vice-president of the European Investment Bank.
“The Bank Gospodarstwa Krajowego has been the first institution in Europe to become accredited by the European Commission under the so-called pillar assessment, which is required in order to become an implementing partner of InvestEU. We hope to be able to implement this programme quickly so that the support can reach the first Polish businesses before the end of the year. This is especially important during the recovery from the COVID pandemic,” stresses Beata Daszyńska-Muzyczka, President of Bank Gospodarstwa Krajowego.
Arkadiusz Lewicki, Director of the National Contact Point for Financial Instruments of the European Union Programmes, adds that in a special survey conducted by the NCP, Polish financial institutions assessed the new programme very favourably and said that they would apply as soon as the recruitment of financial intermediaries had started. As a result, SMEs and mid-caps will soon be able to count on attractive support from the InvestEU Programme.
