CMS has advised BaltCap Infrastructure Fund in relation to the public-private partnership (PPP) construction of state-of-the-art street lighting in the municipality of Kobylnica, in the Pomorskie Voivodship. The project is worth PLN 12 million, making it the largest local government investment in street lighting under a public-private partnership in Poland.
“This project could open up a market segment in which PPP has not been widely used for new investments. There is a significant need for local authorities to carry out PPP lighting projects. However, when it comes to preparing and structuring these projects, local government bodies still have a limited knowledge of the related technical, financial and legal aspects. This is why the importance of projects such as the one in Kobylnica for the development of the PPP market in Poland cannot be overstated. There are still no good examples of PPP projects being carried out in Poland by the central authorities,” says Marcin Bejm, the partner heading the energy and infrastructure practice at CMS.
Pursuant to the agreement, IZIM (belonging to BaltCap Infrastructure Fund) will be responsible for designing, financing and constructing energy-efficient LED street lighting in 12 towns in the municipality of Kobylnica. Under the agreement, IZIM will install more than 800 modern LED lighting fittings along approximately 30km of roads. IZIM will also be responsible for maintaining this infrastructure for 12 years.
BaltCap is an infrastructure fund that has been operating in the Baltics since 1995. The funds invested by BaltCap come from, amongst others, the European Investment Bank, European Bank for Reconstruction and Development, and Scandinavian pension funds.
Marcin Bejm comments: “At the present time, when local governments are faced with additional costs while simultaneously experiencing lower budget receipts, it is worth considering the PPP option for carrying out selected investments. The split of costs between the private partner and the public partner that is offered by the PPP model makes it possible to maintain the existing tempo for the development of local government investments”.
The scope of work undertaken by the CMS lawyers included analysing the tender documentation, making comments on the draft PPP agreement, preparing draft agreements with the private partner’s sub-contractors, as well as providing support in issues related to financing the project.
The comprehensive legal assistance was provided by a team of lawyers led by Marcin Bejm and including Piotr Gałązka, Patrycja Styczyńska and Alicja Smyklińska.
The CMS team has also recently advised on a number of other PPP projects in Poland in the following sectors: waste management, car parks, schools, recreation facilities, and nursing homes.
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