Financing secured for Krakow PPP tram project

Krakow Fast TramThe City of Krakow, Gülermak and financial institutions signed a contract for the fourth phase of Krakow Fast Tram extension project which is carried out under public-private partnership (PPP).

Works are expected to start this spring after obtaining the ZRiD decision (a permit for the implementation of infrastructure investment) covering the construction of a 4.5 km tram section to Championjowice and 9 new tram stops and the reconstruction of the existing Mistrzejowice terminus.

“The project of the new tram line to the Championjowice is the largest transport project in the public-private partnership model in Poland. Thanks to this connection, the travel time to the city center will be shortened by approx. 12 minutes,” Jacek Majchrowski, the Mayor of Krakow said.

The extension will connect the city centre with the Mistrzejowice terminus with the intersection of Meissnera and Lema Streets, which will reduce the travel time to the city center by 12 minutes. The new line connect residential districts in the northern part of Krakow with the city centre, making commuting into the city faster and easier.

The entire project is estimated at PLN 1.92 billion (EUR 408 million) and includes the construction of a 940-metre tunnel in the area of the junction with Młyńska Boczna Street. The tunnel will have two stops designed as a multi-level transfer nodes in the vicinity of the Polsadu roundabout. In addition, the project includes works for 10.4 km of road infrastructure.

In December 2020 an agreement was signed between the City of Krakow and the consortium of PPP Solutions Polska and Gülermak AGir Sanayi Insaat ve Taahhu, which must secure financing, design, obtain the necessary construction permits and build the line. Under the agreement, the private partner will be responsible for the maintenance of the infrastructure for 20 years. After, the city will take over the assets.

“We are aware that residents have been waiting for the construction of this connection for a long time, and in recent months we have been completing hundreds of documents, conducting complicated negotiations and preparing to meet the stringent requirements of financing institutions,” Bülent Özdemir, director of Gülermak for Poland said.

The European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), Bank Pekao SA and the Polish Development Fund are the financial institutions which have agreed to co-finance the project.

In January 2023, the EIB and PPP Solutions Polska signed a PLN 180 million (EUR 38 million) financing for a new tram line. “We are pleased that this PPP transaction will open up new financing opportunities for other local governments. Investments in the sustainable development of public transport are of key importance,” Vice-President of the European Investment Bank Teresa Czerwińska said. In 2020, the bank has approved a EUR 34 million loan for the PPP tram project. It is expected that EIB would provide a financing package of around PLN 565.5 million (EUR 120 million).

In December 2022, the EBRD and Gülermak signed a EUR 54 million agreement for the PPP Solutions Polska, a special-purpose vehicle owned by the Turkish company. This loan is part of a PLN 824 million (EUR 175 million) overall financing to be provided for the implementation of Krakow Fast Tram extension.

The project’s design work is currently 60% completed and its has been identified the location of one of the traction substations to power the underground section. The first station will be developed on the area of Bohomolca and Marchołta junction which together with the necessary infrastructure, the facility will occupy. 225 sq m. This decision helped to reduce the occupation of the land for the needs of operating the facility to a minimum. According to analysis made by Gülermak, nearly 60 km of new cables and two traction substations will be needed to operate the 4.5 km tram line. They will be equipped with 4 rectifier units of 800 kW each.

The private partner has designed the power supply system to meet contractual provisions and support the frequency of tram running at every 90 seconds.

Krakow Fast Tram extension is expected to be completed in 2025. The project is aligned with the city’s  development strategy which plans on a gradual reduction of car traffic in the city centre in favour of alternative transport options.


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