The European Investment Bank Group’s financing amounted to €5.4 billion last year, driven by investments in infrastructure and environment and showing increasing support for small and medium-sized businesses
In the first months of 2020, the EIB has signed new loans for renewable energy and sustainable transport projects, supporting Poland in its climate transition
In light of the COVID-19 emergency, the EIB Group is ready to intensify its support for the Polish and European economy
With €5.4 billion of overall financing 2019 was a strong year for the European Investment Bank (EIB) Group in Poland. The Group’s activity was 13 % higher than in the previous year and in line with the trend of the past five years. Loans granted to public and private counterparts by the EIB amounted to €4.3 billion, while the European Investment Fund (EIF) provided €1.1 billion in guarantees and equity investments to small and medium-sized businesses and mid-caps.
Poland was the fifth biggest recipient of EIB Group financing among EU countries, after Italy, Spain, France and Germany. This financing represents more than 1% of Poland’s GDP, making the country the second largest beneficiary among countries with a population above 10 million after Greece. This shows the impact of the EU bank’s operations.
In the first few months of 2020, new operations were signed in renewable energy production, with a €60 million loan to Pomerania Wind Farm (a subsidiary of the Lithuanian Ignitis group), and in sustainable transport. A €480 million loan to LG Chem for the construction of electric-vehicle batteries in Wroclaw was announced today.
“Last year, the level of activity of the EIB Group in Poland was once again significant. The EU bank financed important projects in all sectors of the economy, with a particular focus on infrastructure and environment, and with record volumes of loans and guarantees to small and medium-sized businesses. We take these positive results as a motivation to continue to support the Polish economy as it faces the daunting task of fighting the coronavirus crisis,” said EIB Vice-President Teresa Czerwińska, who is in charge of operations in Poland following her appointment to the EIB Management Committee on 1 March.
TeresaCzerwińska added: “We will work tirelessly with all our public and private partners in Poland, so that we continue to finance projects that help the Polish economy to be more resilient to shocks and more prosperous in the longer term. The EIB stands ready to further support SMEs, who are the most vulnerable economic actors in times of social and economic lockdown. The package announced last week of up to €40 billion for European SMEs is a first step in our commitment. We will do everything we can to combine national and European efforts and I trust that by working together we will overcome the coronavirus crisis, in Poland as well as in Europe.”
"2019 was another year of very good cooperation between Poland and the EIB Group," said the Minister of Finance, Tadeusz Kościński. "This is confirmed by figures, with €5.4 billion of financing provided to Polish enterprises, national and local government bodies. This ranks Poland 5th among EU countries. EIB Group financing supported, among others, railway upgrade projects, renewable energy, access to finance for SMEs, scientific research programs and hospitals modernization projects. Last year, the role of Poland as the Bank's shareholder also increased. We strengthen our contribution to the management of the Bank. I hope and I am confident that the Bank will continue its support, including its commitment to tackle the challenge of COVID-19 today. "
2019 results overview
Infrastructure and environment
Projects related to infrastructure needs attracted €1.68 billion, while projects with a direct climate action and environment component received €1.05 billion of financing. Taking all projects in aggregate, climate action accounted for 31% of the EIB Group’s financing, in line with the Group’s global level.
In many cases, EIB support improves the country’s infrastructure, while at the same time facilitating the transition to a more climate-friendly environment. For example:
Railways attracted the biggest part of EIB loans for transport projects in Poland in 2019 (€738 million), more than roads (€617 million). In particular, the EIB financed the modernisation of 195 km of PLK railway lines between Poznan and Szczecin (E59), as part of the Baltic-Adriatic corridor upgrade.
Cleaner energy projects also received solid backing. The EIB supported the upgrade of municipal heating networks in Bydgoszcz, Lublin and Opole, to make them more energy efficient, and signed a €64 million loan to finance the construction by PGE of three onshore windfarms on the Baltic coast for a combined capacity of 97 MW.
Small and medium-sized business
A combination of EIB credit lines (for approximately €1 billion) as well as EIF guarantees and equity investments (for approximately €1.1 billion) provided a record amount of around €2 billion in fresh financing to Polish SMEs and mid-caps. The EIB Group lends to SMEs mainly via partnerships with Polish banks, leasing companies and other financial institutions. It lends to those financial intermediaries who, in turn, on-lend to their clients with attractive rates and maturities, making access to finance easier for small business. Part of those loan agreements, with partners including mBank and BNP Paribas Polska, will support dedicated energy efficiency programmes carried out by SMEs.
The EIB also financed SMEs directly. The bank signed a €50 million loan with the diary company Mlekpol to upgrade its production and storage facilities. The operation was backed by EFSI.
Innovation, research, health
Projects with a strong innovation component received €695 million. Around €480 million were invested in science, supporting the early-stage research and applied R&D projects of national science and research centres in Krakow and Warsaw, and the education and research programmes of the Polish Academy of Science. A €45 million loan was signed with the specialty chemicals company PCC Rokita for its modernisation programme, including a new Centre for Innovation. The EIB also signed a €30 million loan with Mabion, the first biotech company in Poland to receive EIB backing.
University hospitals in Gdansk and Lublin received a €91 million loan for the modernisation and extension of their facilities, via an agreement with the Ministry of Finance. This operation followed two direct loans signed in 2018 with university hospitals in Warsaw and Poznan, showing the readiness of the EIB to support the healthcare sector in Poland.
European Fund for Strategic Investments (EFSI):
Poland also ranks fifth among EU countries in terms of loans received under the European Fund for Strategic Investments (EFSI), which is the financial pillar of the “Juncker Plan”. This plan, launched by the European Commission and the EIB in 2015, helps attract public and private investments into projects by taking on a higher risk than is usual for EIB lending activity. As of 31 December 2019, there were 73 approved EFSI transactions in Poland amounting to €3.9 billion. They were expected to mobilise €21 billion of total investments.
The EIB has signed today its first loan to a company building and running photovoltaic plants in Poland. The EU bank will lend PLN 82m (around EUR 18m) to Energy Solar Projekty sp.z o.o. for the construction and operation of 66 small-scale, independent photovoltaic (PV) plants. With an average nominal capacity for each plant of less or equal than 1 MW, the total capacity will reach about 65,6 MW. This is the equivalent of 19,000 households, which could be supplied with the energy generated by the project.
The EIB has signed a €480 million loan agreement with LG Chem Wroclaw Energy, the Polish subsidiary of the LG Chem Group that was established to develop the group’s battery production facility in Europe. The financing will be used for the construction and operation of highly automated and innovative manufacturing facilities for advanced lithium-ion (li-ion) cells and batteries for battery-powered electric vehicles (BEVs). The EIB financing will cover around a third of the total project costs, estimated at €1.5 billion. The remainder will come from the company’s own resources and from other financing sources.
The Lithuanian utility will carry out the project through its subsidiary Pomerania Wind Farm. New onshore wind farms with a combined capacity of up to 94 MW will be located near the Baltic coast in northern Poland. The operation, backed by the Investment Plan for Europe, will help decarbonize the energy sector in Poland and improve the energy mix.