Biznes Fakty
Weapons instead of green transformation. New fund within the KPO
A new Security and Defense Fund amounting to PLN 30 billion is set to be established, as announced by the Ministry of Funds. The resources will be drawn from the National Reconstruction Plan (KPO) and will be directed toward dual-use investments, such as roads, shelters, and manufacturing by Polish defense firms.
Katarzyna Pełczyńska-Nałęcz, the head of the Ministry of Funds and Regional Policy (MFiPR), indicated in a press release that the creation of this new defense fund has already been approved by the European Commission (EC).
New fund within the KPO
– We are establishing a new Security and Defense Fund with a total of PLN 30 billion. We are reallocating some resources from the Green Transformation of Cities initiative. This new fund will support local authorities, enabling them to invest in dual-use projects like roads and shelters. Additionally, the fund will encompass defense research and the production efforts of Polish arms manufacturers – the Minister of Funds elaborated.
Prior to the government meeting on Tuesday, Prime Minister Donald Tusk announced that the Ministry of Funds is considering the potential to allocate up to PLN 30 billion from the KPO for defense and the arms sector.
– I want to express gratitude to Minister Pełczyńska-Nałęcz for the information shared just before our government meeting, which confirmed that regarding the KPO, there is a possibility and work has already begun on reallocating up to PLN 30 billion (…) towards broadly defined defense and the defense industry – Tusk stated. He emphasized that this would necessitate prompt collaboration from other ministries. The Prime Minister also revealed that the Council of Ministers may adopt a legislative proposal within a week to facilitate and simplify investments in defense. He underlined the need for a significant acceleration in the progress of this project. Pełczyńska-Nałęcz informed on Tuesday that following the announcement from European Commission President Ursula von der Leyen, she would carry out a review of the National Recovery Plan concerning the reallocation of funds to defense and economic resilience, stating – Conclusions will be reached within a few days – she added.
Suspended military aid and European rearmament plan
The White House declared that it has halted all military assistance to Ukraine – including supplies that are currently on their way to the country and those stored in Poland – „to ensure it aids in resolving” the conflict. Ukrainian Prime Minister Denys Shmyhal stated on Tuesday that his nation is prepared to finalize an agreement with the United States regarding minerals „at any moment.” Ursula von der Leyen introduced a five-point strategy on Tuesday aimed at rearming Europe, which is expected to mobilize as much as 800 billion euros for defense. This includes a 150 billion euro loan package for air defense and the potential utilization of cohesion policy funds.
National Reconstruction Plan
The National Recovery and Resilience Plan (KPO) aims to bolster the Polish economy. Funds from this program are designed to expedite Poland’s progress toward previously established objectives, implement new investments, stimulate economic growth, and enhance employment levels. Under this initiative, Poland receives financial assistance in the form of non-repayable grants and preferential loans. To date, Poland has secured PLN 67 billion from the KPO. Minister Pełczyńska-Nałęcz announced at the end of February this year that Poland has already committed a quarter of the total funds from the KPO – both in the form of grants, of which 40 percent has been contracted, and „soon” it will reach half (PLN 47 billion), along with loans (PLN 20 billion). She also mentioned that approximately PLN 20 billion from the KPO loans designated for the green transformation of cities could be redirected toward armament investments. According to her, this necessitates discussions with the European Commission but does not necessarily imply a revision of the KPO.
