BGK has launched a call for applications for a loan supporting green transformation of cities

Bank Gospodarstwa Krajowego (BGK) has launched a call for applications for a loan supporting the green transformation of cities, the bank said. The project's budget amounts to PLN 40 billion. The loans may benefit, among others, local governments, municipal companies, housing sector entities (e.g. cooperatives), universities or cultural institutions.

The loan will finance investments that contribute to the achievement of the goals set out in the European Green Deal and KPO. These are projects that lead to climate neutrality and the reduction of negative human impact on the environment, it stressed.

The loan can be used to finance, among others, the construction or revitalisation of parks, the preparation of green spaces, investments in local government RES, zero-emission public transport (e.g. purchase of vehicles, construction of tram tracks), thermal modernisation, water and sewage networks. [...] Support applies to projects implemented in cities. It can also cover investments in areas belonging to an urban functional area - for example, the construction of tram tracks connecting a city with a suburb, it was announced.

The loan to support the green transformation of cities is granted for up to 20 years. Its interest rate (depending on the project and the status of the entity applying for funds) is between 0 and 1%. In the event that the investment does not generate revenue and cost savings, 5% of the loan principal will be waived. Capital repayment grace period is up to 24 months from the date of investment completion.

The minimum value of an application is PLN 2 million and the maximum is PLN 500 million. One application may include several investments, which, if successful, may be financed under separate loan agreements, it also indicated.

Important deadlines:

- A loan agreement can be concluded with BGK until 31 August 2026;
- Until the end of 2027, borrowers have until the end of 2027 to disburse the funds, i.e. they have to fulfil all requirements for the disbursement of the loan;
- The investment must be completed by 31 December 2030 at the latest.

Source: BGK and ISBnews