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POLAND: EC accepts Loan Subsidies
The European Commission has green lighted the first of Poland’s three aid mechanisms directed at large enterprises. The loan subsidies mechanism, adopted by parliament as part of the Financial Shield, assumes EUR 2.2 billion of loan subsidies, which will be managed by the Polish Development Fund (PFR). This support will be available to companies facing downturns caused by the COVID-19 epidemic. To meet eligibility criteria companies must have employment levels exceeding 250 persons and a turnover exceeding EUR 50 million or a balance sum of EUR 43 billion. Eligible companies can now submit a preliminary request for aid through the PFR.
The measure will only apply to loans used by companies to cover the costs of salaries, the purchase of required production materials or paying for other necessary operating expenses. The maximum financing period is two years with an option for an additional extension by one year. A single loan subsidy amounts to a maximum level of PLN 1 billion.
The loan subsidy mechanism is only part of the Financial Shield. The European Commission is still due to issue a decision on PLN 7.5 of preferential loans (with an option to wave repayment), as well as a PLN 7.5 budget support companies through the acquisition of their shares.