Urban Development Fund in Pomorskie is an ERDF co-funded financial instrument, managed by Bank Gospodarstwa Krajowego (BGK, the State Development Bank of Poland
Implemented under the Pomorskie Regional Operation Program (ROP) 2007-2013. It supported urban projects in the region's four major cities: Gdańsk, Gdynia, Sopot and Stupsk. The projects had to be financially viable, with a commercial element to ensure profitability and generate a financial surplus to repay the loan, or they must rely on other sources of income. The project must also have social elements that are important to the local community, such as improving the attractiveness of the area and thus raising the quality of life for local residents

The instrument addressed market gaps and gained reputation among promoters and contributed to stability among investors in the region. The UDF introduced a low-interest rate long-term loan. Investment terms depended on the type of project and the investor. As a general rule, the interest rate was the National Bank of Poland’s reference rate, which could be reduced by up to 80% based on the so-called social indicator. This indicator assessed the project’s impact in four areas: social, economic, environmental and spatial planning. Projects with the highest contributions were offered more favourable interest rates.. Loan repayment were up to 20 years and the grace period up to 12 months following the project’s completion.

No 'soft' support was provided, however very close cooperation between the final recipient, BGK and Pomerania Development Agency (ARP) was key during the preliminary implementation stage.

Resources needed

The total UDF allocation was €59.96 million. The sources of funding were as follows: ERDF: €33.87 million, Regional co-financing: €5,98 million, BGK private funding: €20.11 million.

Evidence of success

By October 2014 under JESSICA 19 investments agreed for loans of €41.7 million. Committed allocation exceeds the contributed capital due to interest earned on this capital. Loans paid to final recipients amounted to €25.6 million, approximately 61% of the allocation. Supported investments total approximately €91 million.
As a result, public facilities are being used by 658 480 citizens; 1.06 million kWh of energy were saved, and 41 jobs directly were created.

Potential for learning or transfer

-All the stakeholders needed to adapt their mentality and attitudes, be more proactive, open and engage in dialogue with others.
-The introduction of a repayable financial instrument increased the financial and socio-economic efficiency of investments for final recipients, especially in the public sector.
-Regional authorities focused on efficient management of funds and on innovation of their urban policies.
-The banking and policy management system in the region had the capacity to deliver the financial instrument.
-Establishing and implementing the financial instrument did not require sophisticated organisational structures.
-The implementation structure with the Holding Fund ensured transparency and best practices.

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Main institution
Marshal Office of the Pomorskie Voivodeship
Pomorskie, Poland (Polska)
Start Date
November 2011
End Date
December 2015


Tereza McLaughlin Váňová Please login to contact the author.

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