Municipal Finance Project

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The main goal of the Municipal Finance Project is to promote the development of a credit market for municipal investment in Poland. To this end, the project pursues the following two inter-related objectives. First, it will provide long-term financial resources to commercial banks for municipal lending in the infrastructure sector. And second, it will help the banks identify and prepare a sustained pipeline of viable investment projects, backed by creditworthy towns or local utilities. The project will consist of a single-currency loan to each of two selected commercial banks. The loans finance a program of long term subloans issued by these banks to municipalities and revenue-earning municipal service enterprises. The project will also promote the channeling of donor-provided technical assistance resources (through the Municipal Development Agency-MDA) to market participants including: 1) municipalities, in the areas of project preparation and financial management; 2) banks, for appraising municipal credit and structuring robust loan security arrangements; and 3) the MDA to strengthen its continuing role as a facilitator of municipal investment.