BGK finances development cooperation

Bank Gospodarstwa Krajowego (BGK) has gained the opportunity to support the country's economic policy outside Poland. Under an agreement with the Ministry of Finance, BGK has taken over the administration of the Financial Instrument for Development Cooperation (DFI). Among other things, the bank can implement investment projects outside the EU, for example in Ukraine, combining European instruments and funds with the Polish ones.

Under the latest amendment to the Development Cooperation Act, the Financial Instrument for Development Cooperation (DFI) was established, operated by Bank Gospodarstwa Krajowego. Following this, BGK and the Ministry of Finance signed an agreement sanctioning the rules for handling and transferring funds that will be allocated to DFI.

"BGK will be responsible for administering the Financial Instrument for Development Cooperation, which shows the enormous trust that has been placed in us. Development cooperation is part of national soft power. The Financial Instrument for Development Cooperation is a hard mechanism that will allow Poland to implement it in full. The funds collected in the DFI will mainly come from the State Treasury."

Mirosław Czekaj, President of the Management Board of BGK.

As the operator of the Financial Instrument for Development Cooperation, BGK may:

• offer long-term instruments in the form of direct project financing and interest subsidies, risk sharing,
• provide non-repayable financing for technical assistance,
• allocate DFI funds as capital contributions to international investment funds.

"Domestic entrepreneurs will benefit the most from this. They will be able to use financial support in countries receiving Polish development aid. BGK will offer them, among other things, investment loans, non-repayable grants, and technical assistance."

Prof. Marta Postuła, First Vice President of BGK.

DFI funds may cover part of BGK's own risk, e.g., in conjunction with EU guarantees. DFI does not have the ability to incur debt and thereby increase the public finance sector's debt.

Development cooperation involves providing support to countries affected by humanitarian, political, or economic crises. Polish development cooperation, i.e., Polish aid, is part of our country's foreign policy. The Polish development cooperation programme provides for economic assistance, humanitarian aid, and global education. Under the Development Cooperation Act, amended in May this year, and other acts, Bank Gospodarstwa Krajowego is one of the institutions implementing Polish development cooperation in the economic and financial sphere.