€48m for upgrade of lighting systems in communes across Poland

More information on this topic is presented in the PMR report:

The list of projects qualified to participate in the SOWA investment scheme was closed in April 2014. Out of 48 applications for additional funding for projects involving upgrades of street lighting systems in municipalities and communes in Poland, 34 applications, with the value totalling more than PLN 200m (€48m), have been approved for implementation. As a result, more than 80,000 external lighting fixtures will be replaced.

The SOWA scheme has been long awaited by a great number of municipalities and communes which have not upgraded their external lighting systems yet. The scheme provides an opportunity to obtain a non-refundable grant amounting to 45% of project costs or a low-interest bearing loan to finance up to 55% of the relevant costs.
Therefore, it is hardly surprising why communes are so keenly interested in the initiative. An opportunity to seize up to PLN 15m (€3.6m) in grants or more than PLN 18m (€4.3m) in the case of a loan is not to be sniffed at, especially that the savings that can be made on this account will amount to around 50% and will be relatively quickly realised.
34 projects with the total value of more than PLN 200m (€48m) were approved for implementation as part of the first competition, whose final results were announced in April 2014. The average amount value of projects is nearly PLN 6m per commune, though 64% of the projects have a unit value of up to PLN 5m. However, in terms of value, projects priced at up to PLN 5m represent a share of just over 25%.  In terms of project costs, there are four projects exceeding the PLN 10m threshold. Combined, they account for more than 40% of total costs divided into four projects: lighting systems in Krakow (PLN 33.2m), Bydgoszcz (PLN 22.4m), Szczecin (PLN 13.9m) and Busko Zdroj (PLN 11.6m).
Around 23,000 obsolete fixtures will be replaced by state-of-the-art LED lighting as part of just these four projects.
SOWA is the first ever scheme for promotion of modern external lighting systems for communes. However, the local authorities are to some extent restricted from taking part in the future competitions due to relatively heavy debts. As a result, they frequently cannot afford to secure funds to cover their own contribution to the projects.



Another obstacle is the fact that many municipalities and communes are not authorised to make decisions regarding lighting infrastructure, which is in the hands of power utilities. The latter, however, are hardly interested in projects, profits from which – in the form of lower electricity bills – will go exclusively to communes. Pursuant to the scheme’s rules, the participating communes should hold the infrastructure, either by owning it or being bound by an agreement with the owner (e.g. a lease agreement). Under such agreement, the communes would be able to apply for funds available from the National Fund for Environmental Protection and Water Management (NFOSiGW). In addition to financial benefits to communes and the undoubtedly positive environmental aspect, the scheme is definitely a great idea for producers of lighting devices and systems and contractors which use them. A new source of funds available to investors will significantly boost demand for lighting services and fixtures, thus driving increased profits to the lighting industry as a whole.
It should be noted that SOWA is not the only support scheme addressed for the lighting sector. Local government units can also seek assistance to attain other objectives. For example, they can apply for financial support under the thermal insulation programme targeting public administration buildings where part of the obtained funds can be used to substitute energy-efficient systems for existing internal lighting.






More information on this topic is presented in the PMR report:
Lighting market in Poland 2014. Development forecasts for 2014-2019