Financing environmental protection investments

Magdalena Skurowska

23 March 2022

The 2021-2027 structural EU funds are still waiting to be released. Until then, it is worth taking a look at the domestic funding opportunities for environmental protection projects.

In accordance with the Environmental Protection Act, both the National Fund for Environmental Protection and Water Management and the provincial funds offer co-financing for ecological projects. Various forms of support are envisaged, for example, loans or subsidies.

Forms of co-financing ecological projects in Poland

Currently, many provincial environmental protection and water management funds are accepting co-financing applications on a continuous basis until the earmarked budget is exhausted. For example, the Provincial Fund for Environmental Protection and Water Management in Łódź is accepting applications for preferential loans covering up to 100% of the project’s value. The current interest rate on the loan is 1.5% p.a., with the repayment period of up to 15 years. Co-financed projects may relate to environmental protection tasks, such as:

• construction, installation or modernisation of energy systems using renewable energy sources – e.g. photovoltaic installations, heating pumps, biomass boilers;
• geothermal boreholes;
• construction of highly effective co-generation systems.

After completing the project and evidencing the achievement of the intended environmental goal as part of the undertaking, one can additionally apply for partial cancellation of the granted loan – for up to 20% without the requirement to earmark this amount for further environmental goals, or up to 60% if the amount of the cancelled debt is invested to fulfil specific environmental protection tasks. In practice, these thresholds may still be reduced for enterprises due to additional limitations arising from state aid laws.

Detailed terms for granting the loans, rules for their partial cancellation, and the budget earmarked for this purpose may vary across the provinces.

As the EU-funded programs are not available yet, the above-mentioned opportunities may be an attractive alternative for financing endeavours by environmental protection companies. However, it is worth remembering that it is necessary to prepare and submit the application for co-financing before implementing the project.

Want to know more about co-financing opportunities for ecological projects?  Contact our Rödl & Partner experts.