Government to double funds for local governments to EUR 2.7 bln - PM

Morawiecki noted that apart from the financial aid given by the government to Polish enterprises amid the coronavirus pandemic, local governments also needed "similar support." Paweł Supernak/PAP

The government will double the budget of the Fund for Local Investments to PLN 12 billion (EUR 2.7 billion), Prime Minister Mateusz Morawiecki said on Thursday, adding this will boost local governments' capacity to implement new infrastructure projects.

According to a draft resolution of the Council of Ministers announced on Thursday, the Polish government plans to allocate PLN 12 billion from the COVID-19 Counteracting Fund to support local government units.

Morawiecki noted that apart from the financial aid given by the government to Polish enterprises amid the coronavirus pandemic, local governments also needed "similar support."

"The Government Fund for Local Investments serves this purpose, and it has met with great interest from local government officials. In recent weeks, while traveling all over Poland, I had hundreds of talks, and I found out how many good ideas are waiting to be implemented," the PM said.

The project concerns support for the investment tasks that are to be implemented by the local governments amid the coronavirus pandemic. The funding will be divided into three tranches.

The first portion, worth PLN 5 billion (EUR 1.13 billion) will be allocated to municipalities and cities with a district status; the second will send PLN 1 billion (EUR 226.7 mln) to counties that are not cities with a district status; and the third, worth PLN 6 billion (EUR 1.4 billion), will go to local government bodies.

As the draft resolution states, the first two tranches will be distributed according to the capital expenditure of the individual units planned for 2020 and the level of wealth of units measured with total income per capita less the impact of the so-called "Janosikowe" payments, made by the richest local governments for the benefit of other local governments, to the state budget.

The third phase of the funds will be at the disposal of the prime minister for specific investments proposed by local governments.

The authors of the draft explain that the resolution is aimed at counteracting the socio-economic effects of COVID-19, consisting in the occurrence of unplanned and significant income losses and additional expenses to the budgets of municipalities and counties.

The draft resolution is scheduled to be adopted in the third quarter of 2020.