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Poland should mobilize green bonds to finance investments under the Anti-Crisis Shield

Instrat issued its new report setting out recommendations for the Polish government, on how to link the crisis response with  the European Green Deal. The Green Fiscal Stimulus: Poland is the third COVID-19-related publication by Instrat and part of its Policy Note series.


Based on our review of policies introduced after the 2008 crisis in OECD countries, we recommend that Polish government when designing the Green Stimulus, should (1) build upon existing flagship programs such as Clean Air, My Electricity or Low-Emission Transport to address energy poverty; (2) double the size of direct intervention through investments worth up to 2.6% of Poland’s GDP; (3) issue sustainability bonds and support municipalities in issuance of green bonds to finance investments need for just transition.


The full text of the publication and broadcast from live YouTube debate are available in Polish – switch the language version of this blog post. Executive summary and recommendation are available translated as PDF above.


Executive summary

  • The current recession should not discourage efforts towards achieving long-term low-carbon economic growth. 
  • We recommend the Green Fiscal Stimulus to be included as part of Poland’s Tarcza Antykryzysowa (Anti-Crisis Shield). Program Inwestycji Publicznych (Public Investment Program; PIP), announced by the Polish government should implement projects with a low or at least neutral environmental impact in each of its areas and, thus, fit into the European Green Deal.
  • Investments that stimulate the economy under the PIP are to amount to PLN 30 billion, i.e. approximately 1.3% of Poland’s 2019 GDP. This is not enough given the scale of the challenge and significantly less in comparison with Germany which proposes to allocate almost 3% of GDP for  the green fiscal impulse. Therefore, the size of PIP should be doubled to at least PLN 60 billion, i.e. 2.6% of Poland’s GDP in 2019.
  • Investments in environmentally friendly solutions create more jobs and better development opportunities for domestic companies than investments in high-carbon sectors of the economy. Moreover, spending on combating climate change generates additional benefits by reducing air pollution and improving energy security.
  • The experience of green fiscal stimuli implemented after the financial crisis a decade ago, e.g. by South Korea, shows that they should rely on well-functioning public policies. This is a prerequisite for their effectiveness.
  • Poland has launched a number of initiatives which could form the basis of Green Fiscal Stimulus, though they would require reorganization. These include such programs as Czyste Powietrze, Mój Prąd, and Fundusz Niskoemisyjnego Transportu (Clean Air, My Electricity, and Low Emission Transport Fund).
  • Investments under the Green Fiscal Stimulus should be suitable, timely, and temporary. The ability to quickly create jobs and combat energy poverty should be considered, along with the effectiveness of reducing greenhouse gas emissions and improving air quality.
  • In this context, actions with positive impact on economic growth once the hibernation period ends, are; (i) the thermal efficiency improvement of single-family houses and investments in individual heating and (ii) the development of renewable energy sources, in particular microgeneration.
  • Investments in the above sectors are effective in combating energy poverty which is extremely important due to shrinking household budgets during  crises. Moreover, they reduce air pollution, which leads to respiratory diseases and positively correlates with increased mortality following COVID-19 infection.
  • To finance the Green Fiscal Stimulus, Poland should establish a program for the issuance of Just Transition Bonds. The program should include an increased issuance of green bonds – already announced for 2020 by the Minister of Finance – and the ICMA-standard sustainability bonds.
  • Local authorities should contribute to the implementation and financing of the Green Fiscal Stimulus by issuing their own green and sustainability bonds. Polish government should support such activities through grants covering the costs of issuance such as drafting  investment programs and hiring specialised auditors.
  • Part of municipal bonds should be made available to local communities in the form of small investment size, retail instruments to finance sustainable projects thereby benefiting communities.
  • Bonds issued under the program would also make an excellent investment instrument for Pracownicze Plany Kapitałowe (Employee Investment Plans; PPK).
  • The role of Polski Fundusz Rozwoju (Polish Development Fund) in the heating sector should also mean the participation of Fundusz Inwestycji Samorządowych (Local Government Investment Fund) in public-private partnership projects. High corporate governance standards and transparency in the investment process would contribute to reinforcing trust between municipalities and private investors.


Please cite as:

Instrat. (2020). Green Fiscal Stimulus. Instrat Policy Note 03/2020. Authored by: Paweł Czyżak, Michał Hetmański*, Damian Iwanowski, Katarzyna Szwarc. www.instrat.pl/en/green-fiscal-stimulus.


* Michał Hetmański, michal.hetmanski@instrat.pl, +48 513 748 019