Hybrid PPP becomes fact – EC awards subsidy for Poznan incineration plant

The municipal waste incineration plant in Poznan is the first project in Poland (and one of the first in Europe) to be carried out by way of a public-private partnership which received EU funding. The European Commission took a decision to provide EUR 80 million funding for the project. The Commission’s decision confirmed that it is possible to carry out hybrid PPP projects (i.e. combining private and EU funds) and a well-prepared project can count on a positive assessment not only from investors (and banks) but also from EU officials.

It is worth remembering that the project was structured in such a way that the European Commission’s decision to award the subsidy (or ultimately to specify the subsidy amount) did not delay the investment process.

NB: the PPP contract between Poznan and the company Sita Zielona Energia was concluded in April 2013. Moreover, the private partner had to provide the entire funding for the project at the bid submission stage – regardless of the final amount of the EU funds. This solution gave Poznan assurance that the investment would be carried out and that the construction process would not be delayed due to lack of funding. Given the pace of the work in Poznan it seems that the incineration plant will start operating even before the start date planned in the PPP contract.

DZP was the City of Poznan's legal adviser on the project, including preparing the legal structure and model whereby a PPP benefits from an EU subsidy. Magdalena Zabłocka, attorney-at-law and Senior Associate in DZP's Infrastructure and Energy Practice, was responsible for the legal advisory.