How are local governments entering the digital era?

In Poland, transformation began with the 1990 reform, when local communities – local governments – began to revive. This was a breakthrough: for the first time in decades, residents could begin to truly decide on their own development and that of their surroundings. In the early years, local governments focused on building infrastructure and reorganizing administration. However, it quickly became clear that decentralization alone was not enough. Managing even the smallest municipality is a complex process; without modern tools, it was difficult to make sound decisions. And so began the first wave of digitization.

The first wave of digitalization

At the beginning of the 21st century, more and more local governments began using basic IT systems—population registers, digital real estate databases, and accounting software. In 2008, ePUAP was launched, a platform intended to serve as a digital gateway to public offices. However, the road to full digitization was bumpy: a lack of resources, civil servant competencies, and integrated system interoperability hindered development.

Despite the challenges, many local governments began offering their stakeholders their first online services. E-offices, remote appointment bookings, and in some cities, the first participatory budgets managed digitally emerged. However, the real change was still to come.

The pandemic as a catalyst

The onset of the COVID-19 pandemic proved to be a turning point. Local authorities were forced to operate in a completely new way – from remote work to remote service to residents. Those municipalities and counties that had already invested in digital solutions coped significantly better. The rest understood that digitization was not a whim, but a prerequisite for efficient operation in all conditions. Since 2020, we have observed enormous interest in new IT tools, not only for administration but also in education, managing public spaces, public transport, and monitoring air and environmental conditions.

What's Next? Smart Cities, Cloud Data, and AI in Government

Today, local governments face a new opportunity: to move from document digitization to data analysis and process automation. This is a new era of local administration based on knowledge and data. Investments in the cloud, cybersecurity, artificial intelligence, and cutting-edge systems are no longer a distant future—they are a reality for many European cities. It's time for Polish cities to join this ranks.

But how to finance this technological leap?

In response to these challenges, Bank Gospodarstwa Krajowego (BGK) has launched a digitalization loan application process under the National Recovery Plan, specifically for local government units and municipal companies. This financial tool can significantly facilitate digital transformation at the local level.

What can the funds be spent on?

Among other things, smart energy networks, advanced digital technologies, and ICT infrastructure (information and communication technologies)

The conditions are very favorable:

• the loan can cover up to 100% of the investment costs (net),
• interest rate - from 0%,
• repayment period - up to 20 years,
• a grace period for capital repayment is possible - up to 12 months.

The future starts locally

Digital transformation is no longer a luxury—it's the new standard. And local governments have the opportunity to become leaders in this change. From digital resident cards, to automated street lighting management, to intelligent analytics—the future of local government administration is happening now.

With appropriate support—such as the Digitalization Loan—even smaller municipalities can confidently embark on this path. But be warned! The minimum amount of support is PLN 5 million.

More information, documents and application instructions can be found at:

www.bgk.pl/pozyczkanacyfryzacje

This text was created in cooperation with Bank Gospodarstwa Krajowego (BGK). This article is for informational and marketing purposes only. More information about the product can be found at: www.bgk.pl/pozyczkanacyfryzacje