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USAID Mission to Poland
Europe & Eurasia
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Last updated: 39
Activity Reports
Energy and Environment
Given Poland's difficult environmental legacy and the need to reform the energy sector in a way that the environment is not further damaged, assistance to this area was present throughout the decade of USAID assistance to the country. A brief decription of the assistance is provided below, or you may wish to consult a description of key activities.
USAID assistance to develop Poland's energy sector
The Polish energy sector in 1989 was a state-owned, vertically integrated system that failed to satisfy demand, and suffered frequent short-falls in the amount of power and heat provided to customers. Because of subsidies and a lack of data, there was no way to calculate the true cost of energy, and there was no incentive to conserve energy.
Over the ten years that USAID provided technical assistance to the energy sector in Poland, the focus has been on two main goals:
- to improve the long-term provision of energy services while imposing market economy principles, by preparing the privatization of the sector, and introducing a legal and regulatory framework to support such a system; and
- to promote the efficient use of energy, through demonstration projects and the introduction of inducements that support energy conservation initiatives on both the supply and demand sides.
USAID made fundamental contributions to the restructuring of the sector by:
- participating in the drafting and supporting the passage of an Energy Law and its enabling regulations, thus liberalizing the sector and providing for a regulatory framework to calculate prices and approve tariffs and costs;
- training and advising the staff of the new Energy Regulatory Authority so that it can function in an efficient and transparent manner issuing and approving licenses and tariffs for both heat and electricity prices;
- training power and heat companies to understand the new market-based system, and providing them with models to calculate costs and tariff structures;
- providing critical initial advice to the drafting of laws and regulations that encourage the modernization of Poland’s housing stock, limit energy use, reduce the cost of energy to individual customers over the long term, and reduce the environmental impact of wasteful energy use;
- working with the energy sector on a regional basis to ensure cooperation between regional power companies (through CENTREL), thus assisting in the achievement of interconnectivity with the Western European energy grid.
USAID has also provided training to a number of power plants, making their operations more efficient. Overall, the assistance has helped to lay the groundwork for the privatization of the Polish energy sector, whose completion is now scheduled for the end of 2002. Benefiting companies that have been selected for privatization by 2001, and which have received pre-privatization assessments, include those in Gliwice, Rybnik, and Torun.
USAID assistance to develop Poland's environmental sector
The poor environmental protection record of the Communist states, with its concomitant effects on health, was shared by Poland. Although the "Solidarity" movement ensured that strong, unambiguous environmental legislation was introduced as early as 1980, there was neither the political will nor the funding available to implement that law.
Since 1989, both economic restructuring processes and environmental investments have brought about remarkable improvements in environmental protection standards in Poland, even though the accumulated damage and delays over the years will take decades to put right.
Significantly, Poland has also managed to put in place funds that finance environmental investments. These include the National Environmental Fund and voivodship (provincial) funds that are the recipients of environmental fines and fees levied against polluters. There is also the EcoFund, established in 1992, under an agreement between the U.S. and Poland that 10% of Poland’s total debt to the U.S. Treasury would be provided to an institution to fund environmental projects in Poland. Similar arrangements are in place with other contributing countries (France, Italy, Sweden, and Switzerland). To date, a total of $100 million has been made available to the EcoFund, and the total U.S. contribution is expected to reach about $370 million by 2010. Expenditure for environmental programs in Poland at present makes up 1.9% of GDP, and has increased 25-fold over the spending levels seven years ago, reaching $2.5 billion in 1999.
Since 1989, USAID has provided over $74 million to fund environmental technical assistance projects in Poland. Of this amount, an estimated $30 million has gone on efforts to reduce emissions, $27 million on environmental projects at the municipal level, and approximately $16 million on energy efficiency activities.
Although initially concentrated in Krakow, USAID support to the Polish environmental sector expanded geographically and focused on the following:
- improving the capacity of local governments and communities to manage and resolve environmental problems;
- laying the groundwork for Poland’s accession to the EU by strengthening Poland’s capacity to absorb successfully pre-accession and structural funds. It is expected that EU support to environmental projects in Poland will reach $170 million per annum until accession; and
- funding environmental improvements, particularly in the Krakow area, especially reducing low emissions pollution by 70% and establishing a system to monitor mobile source pollution.
Funding for technical assistance through USAID has been used primarily for:
- preparation of infrastructure projects for financing the propagation of waste minimization technologies in Polish industry, and development of domestic supply and demand for environmental consulting services; and
- training programs and publications for municipal and industry decision-makers have included dissemination of environmental best practices; financing; constructing or modernizing waste water treatment plants; financing, siting, and planning for sanitary landfill projects; and environmental health curriculum at the Institute of Public Health at the University of Krakow; and
- energy audits of municipal buildings, and training of small businesses in simple technologies of thermomodernization.
An attempt to install a flue-gas desulphurization facility at the Skawina power plant – part of the environmental improvement program for Krakow – failed, at considerable expense to the U.S. and Poland. U.S. funds remaining from this unsuccessful project has been made available to the Government of Poland and are being used for climate-change related investments.
The focus of the assistance shifted in 1996 to focus more on expanding Poland's participation in the Framework Convention on Climate Change and intensifying activities leading to the reduction of emissions from the energy sector, industry, and urban areas. This has been carried out through support for policy and institutional reforms mitigating climate change, enhancing the prospects for environmental protection and greater energy efficiency, and importation of energy efficiency or environmental protection and mitigation commodities from the United States. The USAID program in Poland is further working to ensure reduction of greenhouse gasses.
The Poland Climate Change Program was initiated in September 1999. The $5 million grant supports GOP initiatives to mitigate climate change. Grant funds will be used to finance the importation of energy efficiency or environmental protection and mitigation equipment from the United States. Funds will be disbursed in three tranches in response to GOP legislative, regulatory and policy changes, actions or initiatives ("reforms") that enhance the prospects for environmental protection and greater energy efficiency. The two broad reform categories supported by the program are: 1) increasing Poland's participation in the Framework Convention on Climate Change; and 2) reducing emissions from the energy sector, industry, and urban areas by implementing legal and/or regulatory changes.
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Last Updated on: March 13, 2002 |
