Everything you need to know about KPO. How much money will we get? What will we spend it on? [WYLICZENIA]

Ursula von der Leyen, President of the European Commission, confirmed on Friday that the first advance payment will go to Poland by the end of the year. The tranche will amount to EUR 5 billion (approximately PLN 21.5 billion, at the current low exchange rate of the European currency) from the RePowerEU program. Annexes to the agreement on the payment of advances, signed by Poland, have already been delivered to the European Commission.

During the pandemic, the EU created a temporary Recovery and Resilience Instrument, which is intended to allow member countries to recover from the crisis. It is from this fund that funds are paid for the implementation of National Reconstruction Plans, which are created by the Community countries and approved by the European Union. Poland missed out on the first round of advance payments from the Reconstruction Fund, paid until December 2021. Our KPO was accepted only on June 1, 2022. In addition, the EU agreed to pay money to Poland provided that we meet the so-called milestones, more on that later.

How much money will Poland receive from KPO?

The European Commission allowed this year to modify the KPO and at the end of August, Poland added a chapter on financing energy investments under the RePowerEU program. . Advance payments from this program in the amount of 20%. total subsidy amount are already paid. Poland is to receive them by the end of the year, because the EU has not made them dependent on milestones. That is: the 20 percent. this is the EUR 5 billion that Ursula von der Leyen and Prime Minister Donald Tusk spoke about at today’s (December 15) conference.

After this year’s revision of the KPO, Poland may receive a total of almost EUR 59.8 billion under the program – approximately EUR 25.3 billion in subsidies and EUR 34.5 billion in loans, including funds from RePowerEU. This is approximately PLN 257 billion. The repayment of the loans will end no later than after 30 years, i.e. by 2058.

The European Commission has so far blocked the payment of money from the main part of the KPO for Poland because it demanded a guarantee of the independence of the judiciary and expected specific changes in the law. In total, our KPO includes 50 reforms, which are measured by 106 milestones. “Most of the reforms (18) are related to Component A (Resilience and competitiveness of the economy) and include improving the investment climate and innovation potential, as well as reforming the fiscal system and spatial planning. However, reforms under Component F (Improving the quality of institutions and conditions for the implementation of the KPO) constitute the greatest challenge and are key to launching the first payment under the Polish plan” – These are the so-called super milestones. The implementation of “superstones” allows you to submit applications for the money provided for in the first tranche. In total, the funds will go to Poland in nine tranches. Each subsequent tranche is dependent on different milestones. Other milestones include: public finances, tax breaks for robotization, changes to the rules of procedure of the Sejm, energy, environment, geriatric care and improving the situation of parents on the labor market.

Minister for European Union Adam Szłapka has already declared that Poland will not delay the application for payment of the first tranche from the main part of the KPO. It is to be EUR 7 billion. Szłapka said that Justice Minister Adam Bodnar is working on specific solutions that would be acceptable to the European Commission. – These actions are really very consistent. I think that since joining the Ministry of Justice, Minister Bodnar has probably stayed the whole time and is constantly working on specific solutions, as well as on the legislative path – added Adam Szłapka.

What will we spend the KPO on?

Funds from the KPO complement activities under the EU cohesion funds in 2021-2027, amounting to EUR 76.5 billion. In total, these two sources are expected to supply the Polish economy with an amount of approximately EUR 110 billion. In addition, there is EUR 25.75 billion of funds from RePowerEU. The main part of the KPO is to be divided into six components:

• A. Resilience and competitiveness of the economy
• B. Green energy and reducing energy consumption.
• C. Digital transformation.
• D. Efficiency, accessibility and quality of the health care system.
• E. Green, intelligent mobility
• F. Improving the quality of institutions and conditions for the implementation of the National Reconstruction Plan i
• Increasing Resilience (KPO).

“KPO [główna część, bez RePowerEU – red.] includes 54 investments and ( – ed.) linked to 177 milestones and goals. In financial terms, the largest investments are implemented under Component B (Green energy and reducing energy intensity). The total amount of funds in the component is EUR 13.9 billion, which constitutes 39.2%. support for the plan. This component is mostly financed by loans (EUR 8.2 billion). At the top of the list of individual investments are investments in offshore wind farms (EUR 3.3 billion in the form of loans) and in the replacement of heat sources in residential buildings (EUR 3.2 billion in the form of subsidies). Together, these two investments constitute approximately 18%. plan. None of the investments is financed by either loans or grants,” according to the documentation.

The ten largest investments under the Reconstruction Fund will absorb 56.2%. funds that we will receive from this. These are:

1. Construction of offshore wind farms – EUR 3.25 billion
2. Replacement of heat sources and improvement of energy efficiency in residential buildings – EUR 3.20 billion
3. Investments for the green transformation of cities EUR 2.80 billion
4. Railway lines – EUR 2.40 billion
5. Development and modernization of infrastructure of highly specialized care centers and others – EUR 2.12 billion
6. Strengthening the potential of commercial investments in modern electronic communications networks – EUR 1.4 billion
7. Investments to diversify and shorten the supply chain of agricultural and food products and the resilience of entities participating in the chain – EUR 1.27 billion
8. Providing access to very fast Internet in white spot areas – EUR 1.20 billion
9. Zero and low-emission public transport (buses) – EUR 1.13 billion
10. Support for a low-emission economy – EUR 1.11 billion.

More details can be found in EU documents and in the latter. We learn that the KPO is to provide:

• EFFICIENT AND MODERN HEALTH CARE
  – new equipment for hospitals
  – modernization of medical facilities
  – more medical staff
  – greater accessibility to medical services
  – development of the pharmaceutical industry in Poland
• ACCESSIBLE AND ECOLOGICAL TRANSPORT
  – more electric and hydrogen buses
  – more modern trains
  – further bypasses
  – safer roads
• GREEN DEVELOPMENT PATH
  – faster replacement of old stoves with ecological ones
  – thermal modernization of buildings
  – purchase of photovoltaic panels and solar collectors
  – wind farms in the Baltic Sea
  – new energy-efficient apartments
• DIGITAL TECHNOLOGIES FOR EVERY DAY
  – broadband Internet throughout Poland
  – new public e-services
  – modern IT rooms and computers
  – for schools
  – courses and training
• A STRONGER ECONOMY AND HIGHER EARNINGS
  – new work places
  – new investments and higher earnings
  – helping working parents (more nurseries and children’s clubs)
  – elimination of legal barriers and facilitations for companies
  – innovations and modern technologies.

“transforming the European energy system, with the aim of ending the EU’s dependence on Russian fossil fuels, which are used as an economic and political weapon and which cost European taxpayers almost EUR 100 billion a year, and overcoming the climate crisis.” This money must therefore be used for the development of renewable energy sources, as well as for the construction and modernization of the energy distribution network.

Although these are the plans of Mateusz Morawiecki’s government, taking into account that they were agreed with the European Union, no drastic changes should be expected. However, the new Minister of Funds and Regional Policy, Katarzyna Pełczyńska, announced a review of projects to be implemented with EU funds. – According to the guidelines of the European Commission, they should be invested in switching our energy sector to green energy, produced from Polish sun and Polish wind – said Pełczyńska-Nałęcz, talking about funds from RePowerEU.