We’re proud and humbled to announce that we’ve signed the financing documents for Krakow Tram project as of December 2022. The European Bank for Reconstruction and Development, European Investment Bank and PFR are among the lenders financing the construction of KST IV!

Under the project structure, Gülermak has undertaken to provide equity, arrange financing from financial institutions, organize construction and subsequently maintain the tram line.

The financing represents the longest ever tenor achieved in a PLN financing in Poland and the largest loan ever in PLN in the infrastructure project. In addition, the financing includes a Mezzanine Debt tranche provided by PFR. Gülermak is also injecting its equity financing without any equity partner.

Financing for the Kraków tram in the PPP formula

Construction works will start immediately once the ZRID decision is ready – it is expected in Q1 2023.

“This is a pioneering project and establishes the benchmark with regard to PPP and finance documentation for the next generation of PPP Projects in Poland. Now, we have a well-structured PPP documentation, a first application of Direct Agreement between the Lenders and the Municipality and well-established parameters of financing in place. We should also congratulate Krakow Municipality and their advisors for their leadership against all the odds at a time of regional conflicts, volatile global economy and a high-inflationary environment. We’re also grateful to our lenders EBRD, EIB, PFR among others and our advisors, DLA, JK Law, CMS, Atkins, F1F9 and Indecs – says Turkekul Dogan, CEO, PPP Investments at Gülermak.

Among others, we and the lenders have prioritized environmental and social impact of the Project and applied highest international standards to achieve ‘green loan’ status and also with regard to impact of the project on people during construction and operation stages.

Tramway to Mistrzejowice – a benchmark for local governments

With this project, Krakow Municipality has also established a benchmark for successful delivery of the project among the public entitites and municipalities. The steps taken by the partners of the Kraków project will be a model for other local governments wishing to implement key investments without affecting debt ratios and current financing of other projects.