€23.6 million equivalent loan in local currency for Krakow infrastructure upgrade
The EBRD is supporting the modernisation of the infrastructure in Krakow, the second largest city in Poland, with a PLN 99 million (€23.6 million) loan to Miejskie Prezdsiebiorstwo Komunikacyjne (MPK - Krakow Public Transport Company).
Part of the Krakow Municipal Holding Company, MPK is the provider of public transport services in the city of Krakow, operating 95 per cent of the existent urban transport routes, with the rest being managed by a private company.
Structured under the EBRD’s A/B loan scheme, PLN 30 million will be syndicated to commercial banks, with the rest of the amount remaining on the EBRD’s account.
The proceeds of the loan, the first syndication in the municipal sector in Poland since the start of the crisis, will be used to finance the construction of a new tram line, refurbishment of tram tracks as well as the purchase of new trams in Krakow.
The new tram line will connect the south-eastern parts of the city and the neighbouring municipalities with the centre of Krakow. It is estimated that it will transport additional 2,600 passengers per hour during peak time and shorten the average travel time by approximately 16 minutes.
The project is crucial to the development of infrastructure in Krakow, a city with a population of 750,000, which attracts up to eight million of tourists annually. It will improve transportation links in the city, and will enable MPK to reduce congestion and pollution as well as to improve road safety.
Moreover, the EBRD loan is helping Krakow municipality to attract much needed funding for its increasing investment needs at a time when commercial lending is virtually unavailable.
“This project will enable MPK to extend and to improve tram operations, bringing improved transport services to Krakow citizens. It will help Krakow municipality to pursue the much needed investment into the modernisation of the city’s infrastructure, bringing back commercial financing”, said Jean-Patrick Marquet, EBRD Director for Municipal and Environmental Infrastructure.
“The EBRD investment has a significant importance for Krakow and for Poland’s economy. The funds provided by the Bank will help us improve the quality of the passenger transportation and increase environmental efficiency, while also helping to secure additional financing from the EU,” said Zbigniew Palenica, Vicepresident of the MPK’s Management Board.
The project will be co-financed by a loan from the European Investment Bank and by grant financing from the EU Cohesion Fund. The investment follows the first phase of the Krakow public transport modernisation initiative, implemented with the support of EBRD and EU Structural Funds.
Since the beginning of its operations in Poland, the EBRD has invested over €3.8 billion in the country’s economy.