Investments of Przewozy Regionalne and TAURON Polska Energia are the first projects from state-owned companies to receive funding from the EIB under the European Fund for Strategic Investments (EFSI), which is part of the so-called Juncker Plan. According to European Commission data from November, Poland ranks sixth in the EU with regard to the use of funds from this source.

Investments of Przewozy Regionalne and TAURON Polska Energia are the first projects from state-owned companies to receive funding from the European Investment Bank (EIB) under the European Fund for Strategic Investments (EFSI), which is part of the so-called Juncker Plan. According to European Commission data from November, Poland ranks sixth in the EU with regard to the use of funds from this source.

“The Juncker Plan has accelerated visibly in Poland. The European Investment Bank has already approved 13 large projects from Poland whose value is approximately PLN 15bn. In June we had only one project with a positive decision from the Bank. The TAURON Polska Energia and Przewozy Regionalne agreements – the first from the government sector – show that state-owned companies are prepared to reach for funds from this source,” deputy Prime Minister, Minister of Development and Finance, Mateusz Morawiecki said.

Vazil Hudák, EIB Vice-President responsible for the bank’s operations in Poland, said: “We are happy that the financing of Polish projects under the European Fund for Strategic Investments is gaining momentum. The main purpose of the Investment Plan for Europe is to create jobs and stimulate economic growth, and the TAURON Polska Energia and Przewozy Regionalne projects contribute towards that considerably. The EIB is a long-term financial partner for Polish state-owned companies supporting the development of energy and rail infrastructure in Poland. Today’s transaction with TAURON Polska Energia is a ground-breaking one: we begin a new era of innovative hybrid financing.”

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "Poland is already reaping the benefits of the Investment Plan for Europe. Today's two agreements represent another positive milestone in the Plan's implementation in Poland. I am glad that the EFSI is making a valuable contribution to supporting the upgrade of vital infrastructure in Poland."

State-owned companies reach for financing

The agreements signed today concern the projects implemented by TAURON Polska Energia and Przewozy Regionalne. The value of both these projects exceeds PLN 2.1bn. The EIB is to provide over PLN 1bn.

TAURON Polska Energia will invest PLN 1.7bn in energy distribution infrastructure that will help connect new customers to the distribution network. The form of the project’s financing is innovative. Funds for this project were obtained from the issue of hybrid bonds totalling over PLN 800m that will be taken over by the EIB under the Juncker Plan.

“The hybrid financing extended by the EIB will both be the first issue of hybrid bonds conducted by the EIB and the first issue of hybrid bonds conducted in Poland by an entity outside the finance sector,” emphasised Filip Grzegorczyk, the CEO of TAURON Polska Energia.

“The agreement between TAURON Polska Energia and the EIB under the Juncker Plan is one of first steps in the energy sector investment plan presented by the Ministry of Energy. We are pleased that one of the first projects within the Juncker Plan concerns the energy sector. We have huge challenges ahead, but we will consistently implement our investment plan,” emphasised Minister of Energy Krzysztof Tchórzewski.

Przewozy Regionalne will allocate PLN 200m from the loan granted by the European Investment Bank for the purchase and modernisation of its rolling stock.

“Being part of such a big plan supporting infrastructure and innovation is proof for Przewozy Regionalne that the direction set by the company’s Management Board is right. EIB support is another very important step for our organisation, which, among other things, thanks to the support of Agencja Rozwoju Przemysłu, will close the year for the first time in history with a positive financial result of approximately PLN 50m and stable forecasts for successive years. Passengers will soon feel positive changes occurring in Przewozy Regionalne. The first effects in the form of new and modernised trains will appear on the tracks next year,” Krzysztof Mamiński, President of the Management Board of Przewozy Regionalne said.

„Professionally managed restructuration process is bringing the desired results. The agreement signed with EIB is a confirmation of financial credibility of the company and creates opportunities for its further development. For us, as the majority shareholder, it is extremely important. We are satisfied that Przewozy Regionalne is back on track with new energy, ready to improve the quality of its services”, emphasised Marcin Chludziński, the Chairman of the Board of Agencja Rozwoju Przemysłu.

The agreement concluded between the EIB and Przewozy Regionalne will provide co-financing for the rolling stock modernisation plan of the largest passenger rail operator in Poland, financed from the loans provided by local banks – a consortium of Bank Gospodarstwa Krajowego, PKO Bank Polski, and Bank Zachodni WBK.

Both these investments are the first big Polish public sector projects covered by financing under the Juncker Plan. Another 14 projects, whose total value exceeds PLN 33bn, are currently being evaluated by EIB experts. In June the Ministry of Development, in cooperation with other ministries, created a list of government projects applying for support under the Juncker Plan. At present the list includes 35 projects whose value exceeds PLN 72bn.

Not only government projects

Local authorities and private companies are also supported by the EFSI. The EIB approved the financing of seven private and four local public projects within the so-called “strategic investment window” (for projects worth at least EUR 25m) in addition to the TAURON Polska Energia and Przewozy Regionalne projects.

The Juncker Plan also provides financing to SMEs within the so-called “SME window”. In March 2016 companies operating in Poland signed 190 loan agreements within which EIB support totalled PLN 30m. According to data from the end of October, 3 300 companies obtained financing amounting to PLN 522m.

Among european leaders

“The 13 projects approved by the EIB place Poland among the top five EU countries in the so-called “strategic investment window,” Deputy Prime Minister Morawiecki announced. These are our estimates as projects from other countries are approved on a continuous basis.

According to European Commission data from November concerning both the strategic investment and SME window, Poland ranks sixth after Western European countries such as Italy, France, the United Kingdom, Spain and Germany. We also perform well against other countries from our region – the next CEE country, Slovakia, ranks 11th, the Czech Republic is 17th and Hungary holds 25th position.

What is the Juncker Plan

The Investment Plan for Europe – commonly known as the “Juncker Plan” – was created in June 2015 by the European Commission and the European Investment Bank as a response to the economic slowdown in Europe. The financial pillar of the plan is the European Fund for Strategic Investments (EFSI). The fund enables for guarantee for the repayable financing of private and public projects. The estimated value of the projects that will be implemented all over Europe with EFSI support is EUR 315bn. For EFSI there are no so-called “national envelopes”. Polish projects compete with projects from other countries. According to recent European Commission proposals, the Juncker Plan is to be extended until 2020.