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EBRD helps Polish city improve infrastructure
€22 million loan to improve road, tunnel and tram works in Krakow
The EBRD today provided Krakow, the third-largest city in Poland, with a €22 million loan to help finance works to construct a key road that links the City to the A4 motorway, and to upgrade road, tram and bus infrastructure around the central railway station and the Krakow Communication Centre.
The EBRD loan, which comes without a guarantee from the State or from commercial banks, is the second phase of a total €45 million package under the Krakow Urban Transport Project signed in 1998. The first phase consisted of a €23 million loan to finance a fast tram link running from the north of the city to the south. Both loans are financed jointly with the European Investment Bank.
Thomas Maier, Director for the Municipal and Environmental Infrastructure team at the EBRD, said the loan to Krakow will improve many aspects of the city's transport infrastructure, complement private-sector infrastructure projects, and improve inhabitants' standard of living. He said that over the past 6 years the EBRD and Krakow have worked successfully to improve the city's municipal services. The Bank is separately financing the construction of a major waste water treatment plant.
Phase one of the Urban Transport Project marked the first time a Polish city received long-term financing from an international financial institution without requiring a guarantee from the State, and the loan was accompanied by an EU-financed creditworthiness enhancement programme which has been successfully implemented. Mr Maier said that, under the first loan, Krakow demonstrated to commercial lenders that Polish cities were able to take on large-scale long term loans, and this has helped stimulate the market for medium- and long-term commercial bank lending to other cities including Bydgoszcz, Gdansk, Lódz, Szczecin, and Wroclaw.
To date the EBRD has invested over €230 million in the Polish municipality and municipal utility sector through a mixture of debt and equity financing.
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