The European Investment Bank (EIB) and the Bank Gospodarstwa Krajowego (BGK), the Polish development bank, have signed an agreement to establish an Investment Platform to contribute to social inclusion by support social and affordable projects in different municipalities across Poland. The platform is backed by the Juncker’s Commission’s Investment Plan for Europe, the so-called "Juncker Plan".
The objective of this agreement is to support social and affordable housing investments in the region of some PLN 2,1bn (some EUR 496m) until 2021. The investment platform will finance the construction and retrofitting of social and/or affordable housing units. It will also support the construction of associated infrastructure such as roads, drainage, utilities and recreational facilities. Municipal authorities and registered social and affordable housing providers will be eligible to benefit from the investment platform.
EIB Vice-President Vazil Hudák 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. Thus, we are glad that through the establishment of the Investment Platform with our long-time partner the BGK, the EIB and BGK will join forces to help to close this financing gap. We believe this Investment Platform will serve the municipalities in the revitalisation of urban areas and efficient urban development. What is equally important, this joint initiative will reduce social exclusion by making housing more accessible. The Investment Plan for Europe means also 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."
Beata Daszyńska-Muzyczka, President of the Management Board of the BGK, said: “BGK as bank supporting social and economic development of the Polish economy, has a special role to play in financing social and affordable housing, both within the governmental programmes and its own activity. As a state development bank we can offer long maturities and preferential rates needed in this kind of investments. Thanks to that, in total, we have financed more than 100 thousands of housing units available to less privileged Poles. The EIB has already been our important partner in this activity providing funding for the governmental programme. By entering the 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 Investment Plan for Europe and first investment platform in Poland. It confirms the important role of the BGK in implementing this initiative. The development of social housing is part of the “Mieszkanie+ programme” which is implemented in close cooperation with our subsidiary company BGK Nieruchomości”.
This cooperation will be based on three main pillars. The first one already exists: the National Programme for Support of Social Housing, which EIB supports by partially funding projects in the total amount of PLN 800m (some EUR 190m). Complementary lending aimed at the largest projects is to be provided through individual loans for an amount up to total of PLN 400m (some EUR 95m) from the EIB. These individual loans will be covered by the European Fund for Strategic Investments (EFSI), a central element of the Juncker Plan. The BGK will complement EIB lending in many cases by its own funds. Finally, the last pillar, also totaling PLN 400m, consists of intermediated loans – projects to be financed by BGK, partially or entirely based on the EIB funding.
Entering into cooperation with the BGK under this joint financial product, will enable the EIB to finance investments from smaller promoters. Both institutions will carry out jointly the due diligence and appraisal of the projects, and they may as well undertake joint market surveys and marketing actions. Within the Investment Platform, the projects may also benefit from the support from the European Investment Advisory Hub - a 360 degree offer of advisory and technical assistance services - established under the Investment Plan for Europe.
The Junker Plan is already expected to mobilise over EUR 6.4 billion in investments in Poland and EUR 194 billion across Europe.
The Investment Plan for Europe, the so-called Juncker Plan, is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB to invest in more, often riskier, projects. The EFSI is already showing concrete results. The projects and agreements approved for financing under the EFSI so far are expected to mobilise more than EUR 194 billion in investments and support over 416,000 SMEs across all 28 Member States.
In September 2016, President Juncker proposed to extend the EFSI by increasing its firepower and duration as well as reinforcing its strengths.
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