(Reuters) - The European Commission has given Poland a green light to support an Intel chip plant with more than 7.4 billion zlotys ($1.91 billion) in state aid, deputy prime minister and digital affairs minister said on Friday.
"The European Commission has informed Poland that there is a green light for granting state aid to Intel," Krzysztof Gawkowski said.
"The public aid that we will provide amounts to over 7.4 billion zlotys in the years 2024-26. Today this investment is worth, both in terms of the aid package and in total, over 25 billion zlotys," he added.
Poland must now pass legislation on granting the public funds and then formally notify the European Commission, before it can finalise the deal with Intel.
"We assess that this whole process will be completed by the end of the year," Deputy Digital Affairs Minister Dariusz Standerski said.
The announcement follows a prenotification process with the Commission, which is responsible for ensuring that any state aid provided by EU member states complies with the bloc’s competition rules.
Intel announced plans last year to invest up to $4.6 billion in a new semiconductor assembly and test facility near Wroclaw in south-western Poland, with capacity for further expansion.
The investment aligns with the European Chips Act, billed as a 43 billion euro subsidy plan aimed at boosting Europe's share of the global chip market to 20% by 2030.
Intel is expected to present plans later this month to cut costs and these could include a proposal to pause its $32 billion factory in Germany.
"We have not received any signals in recent weeks or months regarding a change in position ... Based on today's information there is nothing that would slow down this investment," Gawkowski said when asked about the risks to the investment in Poland. He said he hoped Intel could start construction works this year.
"Investment in the Intel factory is the largest investment in Poland in decades... semiconductors in Poland will guarantee both better economic development and greater security."
Standerski said that Poland is ready for further new technology investments and the experience gained with Intel will help the country expedite future investments.