Poland’s largest state-owned bank, BKG, has agreed to loan 81.5 million euros to build a 10-hectare high-tech office park about five kilometers from downtown Lviv, a city of 730,000 people more than 500 kilometers west of Kyiv.
After receiving this loan, Lviv’s Innovation District IT Park will have the 136 million euros needed to finish the first stage of construction, Stephan Veselovsky, the chief executive of local tech company association Lviv IT Cluster, told the Kyiv Post on April 8.
Squeezed by a shortage of office space and local authorities’ unwillingness to resolve it, Lviv IT Cluster took matters into its own hands and conceived the Innovation District, Veselovsky told the Kyiv Post in a 2018 interview. The park will contain offices for 10,000 tech specialists, research laboratories for work and study, and a Ukrainian Catholic University campus for tech-related courses.
It will also have numerous amenities including sports and shopping centers and a kindergarten.
Innovation District IT Park is “an extremely important project for the city and the tech community,” Lviv IT Cluster said in a statement on April 7. Investors and residents think that the project will be profitable given the city’s need for office space.
Apart from BKG, the project is also backed by Canada-based investment firm Brookfield & Partners, Ukrainian investment fund Horizon Capital and property development company Galereja Centre that earlier invested 80 million euros in the construction.
The general contractor of the project, one of Poland’s largest construction companies Unibep, will complete the first phase of construction by the end of 2023 — three years later than first planned.
Both investors and future residents — big-name tech companies like GlobalLogic, N-iX, Intellias and SoftServe — thought that they could move to IT park in 2020.
But according to Veselovsky, “the scale of the project has exceeded all forecasts and expectations.”
The pandemic has also taken a toll: Poland’s BGK, for example, decided to delay its loan to Lviv’s IT park.
“We’ve been waiting for the bank’s decision for a long time,” Veselovsky said.
The investors of the project expected to receive updates on loan negotiations in February 2020 but due to the coronavirus crisis, banks around the world suspended important financial decisions.
Veselovsky told the Kyiv Post that investors chose BGK to fund nearly 60% of the project because the bank offered the most favorable conditions.
Investors couldn’t get money from Ukrainian banks because the size of the loan is too great, he said.
