Juncker Plan: Investment Plan for Europe agreement provides EUR 93 million for transport infrastructure upgrades in Poland
The European Investment Bank (EIB i) and Bank Gospodarstwa Krajowego (BGK), the Polish Development Bank, have today announced an agreement to finance construction of the Łagiewnicka Route, part of the Kraków inner southern by-pass. This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission's Investment Plan for Europe, the so-called "Juncker Plan".
The Łagiewnicka Route consists of 3.7 km of a dual carriageway ring road, along with tunnels, and a 1.7 km of new tram line, is a key project contributing to reduction of the congestion in Kraków. Improving the quality of public transport services in terms of speed, comfort and reliability, this project will also reduce reliance on private cars and thus contribute to a reduction of air pollution. In addition to this, traffic safety will be improved trough the introduction of separate junctions. Construction of the Łagiewnicka Route is expected to begin in 2017 and is planned to be finalised by the end of 2020.
This PLN 400m (circa. EUR 93m) loan makes the EIB is the major lender supporting this project, with the BGK providing additional support of PLN 298m (some EUR 69.3m).
European Commission Vice-President, Jyrki Katainen i, responsible for Jobs, Growth, Investment and Competitiveness, said: "Upgrading the transport infrastructure that underpins our economies to meet future needs will require sustained investment. Today's agreement demonstrates how the Investment Plan can play an important role in unlocking the investment needed to make these projects a reality."
EIB Vice-President Vazil Hudák, responsible for Bank’s activity in Poland, said: “Supporting sustainable transport solutions is a top priority for the EIB. The Łagiewnicka Route project fits this objective perfectly. Our loan will help unblock a major traffic bottleneck in the city and have a positive impact on the urban environment by decreasing the level of harmful car emissions. This will ultimately make a real difference in daily lives of Kraków inhabitants”
The EIB’s long-term financing with attractive pricing conditions was provided to a special-purpose company Trasa Łagiewnicka SA created by the city in 2016. The city opted for the Polish Development Fund (PFR) as a provider of the quasi-equity. The main constructor is the Budimex/Ferrovial consortium, selected in an open tender procedure.
Background information:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. Last year, the EIB provided loans amounting to EUR 4.44bn for Polish projects.
The Investment Plan for Europe, the so-called Juncker Plan, is one of President Jean-Claude Juncker's top priorities. It focuses on boosting European 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), dubbed the Juncker Fund, is the central pillar of the Investment 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 nearly EUR 169 billion in total investments and support over 387,000 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. You can find the latest EFSI figures by sector and by country here.