What is the Cohesion Fund?

The Cohesion Fund was established pursuant to the provisions of Article 161 of the Treaty establishing the European Economic Community (EEC). This financial instrument was set up by the Council of European Union Regulation No 1164/EC of 16 May 1994.

The Cohesion Fund as an instrument of the economic and social cohesion policy provides financial contribution to the projects in the field of environment and trans-European transport infrastructure networks. The Fund contributes to the strengthening of the economic and social cohesion in Member States and leads to the fulfillment of the convergence criteria referred to in Article 104 of the Treaty establishing the EEC.

The Cohesion Fund operates on the national not regional level unlike the structural funds. Initially the support for the Community Member States concerned was planned for the years 1993-1999, however at the European Union Summit in Berlin it was decided to extend this period until 2006.

The Cohesion Fund support is addressed to the Member States, whose per capita gross national product (GNP) is below 90% of the Community average and which prepared a programme of economic convergence laid down in Article 104 of the Treaty establishing the EEC. 

The projects financed by the Cohesion Fund should comply with the provisions of the Treaties, with the instruments adopted pursuant thereto and with Community policies including those concerning environmental protection, transport, trans-European networks, competition and the award of public contracts.

The support from the Cohesion Fund is based on the cofinancing. The maximum rate of aid for the investment projects granted by the Cohesion Fund amounts to 85% of public expenditures or other equivalent expenditures including expenditures by bodies whose activities are undertaken within an administrative or legal framework by virtue of which they may be deemed to be equivalent to public bodies (eligible expenditures). Polish site must guarantee remaining funds from one or several sources. A project may not benefit both from the Cohesion Fund and structural funds. The technical support may be financed at 100% of the total cost from the Cohesion Fund.

According to the Council Regulation No 1164/94/EC the indicative allocation for a Member State is made on the basis of population, per capita GNP taking account of the improvement in national prosperity attained over the previous period, surface area and other socioeconomic factors such as deficiencies in transport infrastructure. According to the Council Regulation 1164/94/EC the assistance from the Cohesion Fund granted to Poland will be divided 50-50 between the two priority categories.

According to the Accession Treaty of Poland to European Union the total resources available for commitments for the Fund set out by the European Union for the period of 2004-2006 amounts to 7.5905 billion Euro at 1999 prices.

Commitment appropriations for each year of that period should be:

Taking into account the criteria used to define the indicative allocation and the financial support available for the commitments in the current programming period, allocation for Poland set up in Accession Treaty varies from 45.65% to 52.72% of the total resources. It means that starting from the 2004 a total commitments per year for Poland will vary in the following appropriations at 1999 prices:

Average allocation for Poland in years 2004-2006 amounts to 3733.3 million Euro. For the current Cohesion Fund programming period (2004-2006) environment and transport infrastructure were defined as a two priority intervention categories in the Framework Reference Document for Cohesion Fund Assistance agreed with the European Commission.

Since 2000 Poland has been receiving support from the Instrument for Structrual Preaccession Assistance (ISPA) which was established by the Council Regulation No 1267/99 on 21 June 1999. After accession to theEuropean Union Poland as a Member State will not be a beneficiary of this instrument any longer because it is addressed to candidate countries. All projects approved as ISPA projects will be continued as the Cohesion Fund projects in the coming years.

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