An (un)usual business model?
Eco-development programme for Dzierzgon Municipality, Poland
Good Best Practice UN-Habitat 1998 2000 2002

Lead Idea

A common "western" cooperative model was adapted for the implementation of Local Agenda 21 (LA21) measures. The municipality of Dzierzgon, in cooperation with NGOs and private businesses, set up a fund for the establishment of new businesses, particularly in the field of the environment. The members of this new cooperative helped to create new jobs and received funding from the state and the World Bank.

The issue at stake

In the early 90ies, Dzierzgon was faced with a rate of unemployment of 35% and the population as a whole was interested very little in political matters. Interest rates for credits were far too high and nobody had the courage to establish new businesses. The environmental situation was in a bad way too. The town with a population of 10,000 had an outdated purification plant capable of purifying no more than 350m³ of water per day. The remaining waste water trickled into the ground unfiltered.

Possible solutions, resources

To raise the money necessary for a business founding campaign, the municipality, together with NGOs and several private businesses, established a kind of cooperative. The purpose of the cooperative was to provide start-up capital and coaching to small businesses that wished to become members. The project was supported financially by the ministry of labour (after all, jobs were generated at the same time) and the World Bank. A business promotion institute, which was also on the board of the organisation, assumed the task of coaching and evaluating new members. Main emphasis was placed on promoting environmental technologies and three new purification plants were built in the process.

Process, effects
Loans were granted at very favourable conditions. Approximately 100 new businesses were launched, all of which were able to repay the loans successfully. In the environmental sector, 85% of waste water was purified. A state-of-the-art waste dump helped to solve the issue of waste. At the same time, environmental pollution was tackled at the roots as residents of the city are now more aware of the issue and thus better able to act independently.

Experiences, transferability

The cooperative model has been practiced successfully in the west for a long time. It is suitable for the implementation of LA21 projects. In the case of Dzierzgon it was adapted to the local situation and is easily transferred to other cities in Poland.

Size of municipality: small town
Participation: municipality, NGOs and private businesses formed a cooperative.
Financing: membership fees, state funding, World Bank