The World Bank approved a Euro 84.1 Million (US$ 100 million equivalent) loan for a Hard Coal Mine Closure Project for Poland.

While Poland has made extensive progress in reforming its economy over the past 10-15 years, challenges remain. Industries with surplus employment and excess capacity-such as coal-are a drag on the economy that must be addressed if Poland is to become a competitive member of the European Union. The World Bank has been supporting the government’s Hard Coal Sector Reform Program to address these issues.

The Hard Coal Mine Closure Project will provide assistance to Poland to reform the hard coal industry to become a profitable sector that contributes to economic growth and improved living standards in support of Poland’s economic integration into the European Union. The specific objective of the project is to improve the efficiency of the hard coal industry by supporting the implementation of capacity restructuring, environmental improvement and subsidence repair for the calendar years 2004-2006. The project will also support improved financial performance and sustainability of the reforms.

The Project is a Specific Investment Loan with Sector Wide Approach features, whereby loan proceeds will be pooled with Government funds and used to directly support physical mine closure and liquidation (including dewatering) and environmental reclamation of closed mine sites.

„Poland has made great progress in coal industry reform over the past decade,“ said John Strongman, World Bank Task Manager for the project. „The new loan supports further capacity restructuring that will take place as part of the Government’s 2003-2006 Hard Coal Sector Restructuring Program. It is a companion to the US$200 million equivalent Hard Coal Social Mitigation Loan, which was approved in March 2004, and provides strong support for workers leaving the coal industry to find employment in other sectors.“

Since Poland rejoined the World Bank in 1986, Bank commitments to the country total approximately US$5.9 billion for 40 operations, including the loan approved today.