Politics

Green funds for defense? Government considers fund reallocation

The Ministry of Funds and Regional Policy informs that approximately 20 billion PLN from the Green Urban Transformation Instrument may be redirected to strengthening Poland's and Europe's defense. The decision on this matter has not yet been made but is under government review.

Kamil Kusier executive editor 23.02.2025, 21:44 Reading time: 2 min

Ship's gun turret on a naval vessel's deck at night against a city skyline — fot. 8FOW / Marynarka Wojenna RP

In brief

Around PLN 20 billion from the Green Urban Transformation Instrument may be redirected to strengthening the defence of Poland and Europe, the Ministry of Funds and Regional Policy reports. The instrument, financed from the National Recovery Plan, comprises preferential loans for local governments worth a total of PLN 40 billion. Minister Katarzyna Pełczyńska-Nałęcz points out that the indicator agreed with the European Commission has been almost fully achieved, so half of the pool can be used differently without harming the project. The decision on reallocating the funds is expected shortly.

Minister of Funds and Regional Policy Katarzyna Pełczyńska-Nałęcz emphasizes that the changing geopolitical situation requires greater engagement in security and European competitiveness.

- These are the goals for which we should allocate the funds saved during the implementation of the National Recovery Plan (KPO). In Poland’s KPO, one such area is the Green Urban Transformation Instrument. These are preferential loans totaling 40 billion PLN, which municipalities can use for green investments. After implementing the agreed projects, we could redirect approximately 20 billion PLN in savings to defense-related investments, the minister explains.

Fewer large investments, more small ones

The indicator for the implementation of the Green Urban Transformation Instrument, agreed upon with the European Commission, was based on the number of signed municipal investment contracts. The assumption was that these would primarily be large projects; however, reality has shown that municipalities have submitted many smaller initiatives instead.

- We have almost entirely met this indicator by allocating a significant portion of the funds for this purpose. The instrument remains available, but it is already clear that about 20 billion PLN in preferential loans can be used differently without harming the project itself, Katrzyna Pełczyńska-Nałęcz adds.

Pressure as a driver of development

Deputy Minister of Funds and Regional Policy Jan Szyszko points out that history shows that Europe develops fastest during times of significant challenges.

- This is one of those crucial moments for the European Union when we must invest more and better in our defense and in the development of Polish and European industry, Jan Szyszko emphasizes.

The Green Urban Transformation Instrument is a program supporting municipal investments financed by the National Recovery Plan. Municipalities can obtain these funds in the form of preferential loans for ecological projects. The total budget amounts to 40 billion PLN. If the government’s proposal is accepted, half of this amount could be allocated to strengthening Poland's and Europe's defense sector.

A decision on the fund reallocation is expected soon.

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Source: PAP / Gazeta Morska · Compiled by: Kamil Kusier