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EU Commission endorses Poland’s modified recovery and resilience plan with new REPowerEU chapter

The European Commission announced on Tuesday (21 November) that it has given a positive assessment of Poland’s modified recovery and resilience plan, which includes a REPowerEU chapter.

The plan is now worth 59.8 billion euros (34.5 billion euros in loans and 25.3 billion euros in grants) and covers 55 reforms and 56 investments.

The three “super milestones” related to strengthening important aspects of the independence of the Polish judiciary and the use of Arachne, an IT tool that supports Member States in their anti-fraud activities, remain unchanged in Poland’s revised plan. This means that no disbursement following a payment request under the plan is possible until Poland has satisfactorily fulfilled these three “super milestones.”

Poland’s REPowerEU chapter consists of seven new reforms, seven new investments and three investments transferred from the original plan (two of which have been scaled up). As noted by the Commission in a press release, changes to the original plan are based on the need to factor in “objective circumstances hindering the fulfilment of certain measures as originally planned,” including the high inflation and supply chain disruptions.

The changes are also based on the request to take up an additional 23 billion euros in available Recovery and Resilience Facility (RRF) loans, as well as the downward revision of its maximum RRF grant allocation, from 23.9 billion euros to 22.5 billion euros. This revision is a result of the June 2022 update to the RRF grants allocation key and reflects Poland’s comparatively better economic outcome in 2020 and 2021 than initially foreseen.

The modified plan has a strong focus on the green transition, allocating 46.6 per cent of available funds to measures that support climate objectives (up from 42.7 per cent in the original plan).

The new reforms included in the REPowerEU chapter concern the streamlining of permitting processes for renewables, the removal of barriers to the integration of renewables into electricity grids and new regulatory solutions for the accelerated development of electricity grids. Moreover, the plan envisages support for energy efficiency in the housing sector and the accelerated phase-out of fossil fuels in home heating, for the development of skills for the green transition, as well as for the facilitation of the development of local energy communities and promotion of sustainable mobility.

The new investments include the development of electricity distribution networks in rural areas, support for construction and modernisation of energy storage systems, the establishment of a fund supporting construction of offshore wind farms, as well as a fund supporting a wider range of investments in the field of energy transformation. Support will  also be provided for the development of the infrastructure necessary to meet the immediate needs related to the security of gas supply.

The European Council will now have four weeks to endorse the Commission’s assessment. With the Council’s endorsement, Poland will receive 5.1 billion euros in pre-financing of the REPowerEU funds.

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