The State Aid team supported the client in obtaining and negotiating a contract for investment support worth 500 million PLN! Granting investment aid to companies from the defense sector is not standard in Poland, so success in this area is even more satisfying! What exactly was the case about?
Support for the strategic area of Poland’s defense
Experts from OW State Aid advised the company Zakłady Sprzętu Precyzyjnego Niewiadów in a pioneering project to obtain a non-refundable grant worth more than 90 million PLN for the construction of a factory that will enable the production of nearly 200 000 pieces of 155 mm artillery ammunition per year.
The investment, whose total value is expected to exceed 500 million PLN, concerns a strategic area for Poland's defense – the production capacity in the field of 155 mm artillery ammunition is crucial for the operational capabilities of the armed forces.
What makes this project significant?
According to press releases, Polish production capacity in this area currently doesn’t exceed 30 000 units of ammunition per year, and the demand for artillery ammunition is high. Between 2023 and 2024 alone, NATO countries have placed an order for 220 000 units of 155 mm ammunition under the NSPA program. Further orders are also expected in this area.
The launch of ammunition production at a rate of nearly 200,000 units per year is therefore of strategic importance to our client, as it represents an opportunity to strengthen its position in the European market.
The broader context of the case
The grant is a regional investment aid, as is the CIT exemption. Originally, both types of support were available to defense companies. However, as of 2023, the CIT exemption regulations have been amended. The possibility of obtaining this type of support for the production of ammunition has been excluded.
For this reason, doubts also arose as to the admissibility of granting aid in the form of grants. The argumentation of our State Aid team, consisting of Justyna Korycka, Jacek Łuczyński and Dominik Jędrak, led to a positive position of the granting authority – the support we applied for on behalf of the client was granted. Congratulations to the whole team!
Favorable changes in CIT exemptions, but... not on time
After we had already obtained funding for our client, a draft amendment to the regulation on granting aid to the defense sector under the Industrial Development Program (PSI) was published. Its provisions are a return to square one – a renewed permission to grant CIT exemption to investments in the production of weapons, ammunition, and explosives.