Billions from the defense fund are getting closer. We know how Poland will spend this money.

• The government is finalizing work on a bill that will establish a Security and Defense Fund, which will be used to allocate funds from the National Energy Policy (KPO) previously earmarked for the green transformation of cities.
• On Wednesday, Deputy Minister of Funds Jacek Karnowski announced how the pool of almost PLN 20 billion will be divided between four goals – civil protection, infrastructure, cybersecurity and modernization of enterprises.
• According to the deputy minister, the interest rate for local governments is to be zero, and for companies – minimal.
• We will discuss challenges facing the military and the economy during the "Defense Industry" conference. The event will take place on October 15 at the International Congress Center in Katowice.

Due to the international situation, the European Union has reallocated some funds from the National Recovery Plan (KPO) to defense. Instead of funding the green transformation of cities, they will be allocated to the new Security and Defense Fund. Its budget in Poland will amount to PLN 19.5 billion, equivalent to €4.6 billion. These funds will come from the loan component of the KPO.

The new Fund will operate in four areas . On Wednesday, in the Sejm, Deputy Minister of Funds and Regional Policy Jacek Karnowski informed one of the committees about the funds allocated for each area.

Therefore, PLN 19.5 billion is to be divided into:

• development of protective buildings and civil protection infrastructure – PLN 8.4 billion ,
• construction and modernization of dual-use infrastructure, including roads - PLN 5.4 billion ,
• investments in cybersecurity - PLN 2.1 billion ,
• modernization of enterprises, including support for scientific research and development - PLN 3.5 billion .

The Ministry of Funds assumes that the money will be allocated, for example, to the construction of new and the modernization of existing protective facilities and shelters. This includes airtight doors, air filters, medical equipment, and communications.

In turn, investments in dual-use road infrastructure, which remains the responsibility of local governments, include, for example, the construction and modernisation of roads, bridges and tunnels, with the length of a road section not exceeding 20 kilometres.

Strengthening cybersecurity could encompass both what is managed by local governments and entities subordinate to them, such as municipal companies. Ministry officials also envision the creation and modernization of crisis communication systems, as well as the protection of water intakes and other critical infrastructure.

The bill is nearing the end of the government's work

On Thursday, the draft bill on the implementation of the Security and Defense Fund as part of the National Recovery and Resilience Plan is expected to be approved by the Standing Committee of the Council of Ministers. This is the final stage of the legislative process within the government before the document is adopted by the entire government and submitted to the Sejm. Karnowski said on Wednesday that he expects the bill to enter into force by the end of the year.

The Security and Defense Fund will provide support through loans to local governments and entrepreneurs, as well as "capital investments" in companies, including start-ups. This latter task will be entrusted – as Karnowski put it – to a "special purpose vehicle" whose sole shareholder will be BGK.

Support for entrepreneurs is to be allocated, for example, to increasing production capacity, launching new technological lines and implementing innovations in the dual-use area, as well as implementing development investments.

The Fund will be hosted by Bank Gospodarstwa Krajowego (BGK). The steering committee will be jointly led by the Ministries of Defense and Funds, with the Ministry of Interior and Administration, Digital Affairs, Development and Technology, State Assets, and Energy also participating.

Ready for the second half of 2026.

"When will we be ready? Most likely the second half of 2026, so it's worth getting ready," said Deputy Minister Karnowski at a meeting of the Local Government and Regional Policy Committee in the Sejm.

When asked about interest rates, Karnowski replied: "For local governments, the interest rate is zero. For companies, the minimum, probably around 5 percent, is still being determined."

"There will also be money to supplement own contributions. (...) There is an ongoing discussion between the Ministry of Finance and us as to whether it will be PLN 3 billion or more to supplement own contributions," said the Deputy Minister of Funds.

He also said that he expected great interest from local governments and encouraged them to prepare to submit an application.