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Investments for Polish

The purpose of the programme announced by Prime Minister Donald Tusk on 12 October 2012 is to maintain the polish economy the current growth rate of investment in infrastructure projects to be carried out over a longer period, while fully using the long-term finance and capital commitment. The programme will focus on creating the conditions for long-term financing of investment projects in the area of power (distribution and generation) and gas (transmission network, development and storage) infrastructure, development of hydrocarbon deposits (including shale gas), transport infrastructure, municipal infrastructure (waste disposal, public transport), as well as industrial and telecommunication infrastructure. The programme has been earmarked for growth generating projects, based on long-term financing of investment with significance to the national economy and to the State's strategic interests. The programme provides for no preferential terms of finance for entrepreneurs. Projects should be financed on market terms.

The programme execution is based on two pillars that provide financing for investment projects - Bank Gospodarstwa Krajowego and Polski Fundusz Rozwoju S.A. (PFR). As a target, both these Institutions should be recapitalised with up to PLN 10 billion worth of shares in state-owned companies. For example, capital injections of Polskie Inwestycje Rozwojowe S.A. will make it possible to invest in special purpose vehicles responsible of infrastructure projects. Capital injections of BGK, on the other hand, will allow for an increase in the volume of new loans and guarantees as needed for long-term financing of those projects. The projected outcome of capital injections of BGK is to leverage ca. PLN 40 billion in the first couple of years of the Programme. Funds for increasing the capital of the two above mentioned entities constituting the pillars of the programme will come from the sale stakes of shares in PGE S.A., PKO BP S.A., PZU S.A. and Ciech S.A., which will be successive contribute to both entities, the contribution of which was approved last December by the Council of Ministers.

The key activity intended to increase BGK's capital potential was the January 2013 sale of BGK-held shares in PKO BP S.A. The successful outcome of the transaction resulted in increasing BGK's core capital from ca. PLN 1.9 billion to ca. PLN 6 billion, which makes it possible to increase the limit of BGK's potential financial commitment to a single entity or to a group of entities from ca. PLN 0.47 billion to ca. PLN 1.5 billion.

BGK's role will be mainly that of an entity offering complementary services at arm's length to other commercial entities (providing "last zloty" necessary to finance a project). Bank Gospodarstwa Krajowego has already taken intensive measures aimed at commencing investment finance processes as part of the programme.

If you have any questions regarding the role and commitment of Bank Gospodarstwa Krajowego in the implementation of the "Polish Investment" programme, please e-mail to dzs@bgk.pl.