The European Investment Bank (EIB) is providing a €250 million loan to Energa to upgrade and extend its electricity distribution network in northern and central Poland. The loan is guaranteed by the European Fund for Strategic Investments (EFSI), the central element of the Investment Plan for Europe, the so-called Juncker Plan. With this loan, Energa will extend its electricity networks, improve the security of supply, invest in renewable energy sources and develop smart meters.
The EIB is also providing Poland with two loans amounting to €730 million for research, development and innovation (RDI) activities in scientific research institutes and universities. These loans are supported by InnovFin Science, which is backed by the EU’s research and innovation programme, Horizon 2020. Some 150,000 researchers, technicians and support staff work in the Polish public science sector. The InnovFin Science-backed loans will not only help to fund the existing research jobs in science in Poland, but will also create new career opportunities, in particular for young researchers.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: “Today’s agreement in Poland under the InnovFin Science programme is momentous. With a fresh injection of €730 million for research, development and innovation activities, research institutions in Poland will see huge benefits. I am also proud that the Juncker Plan is helping to upgrade and improve the electricity networks in Poland. The European Fund for Strategic Investments is already set to trigger more than €225 billion in investment across the EU, with 26 projects already approved in Poland. I encourage project promoters and small companies seeking financing to make the most of the support offered by the Juncker Plan.”
Deputy Prime Minister of Poland, Mateusz Morawiecki said: “Investments constitute one of the pillars of the government’s Responsible Development Strategy. We would like to fully utilize available financing sources both in terms of small and medium enterprises, as well as large-scale government initiatives. For the last year and a half Ministry of Economic Development has been coordinating and monitoring the implementation of the Juncker Plan in Poland and we are very happy to observe and report its effects. Data published by the European Investment Bank shows that Poland places 6th among all EU countries in terms of transforming funds from this source into investments. The current contract is third in a series of contracts supporting government investment projects. Total value of the three investments – Energa, Tauron and Przewozy Regionalne altogether amounts to PLN 5.6 billion.” He added: “The EIB remains our main partner among the international financial institutions, therefore I am very happy to sign two new loan agreements with the Bank, which will provide financing for R&D projects, essential for economic growth. The new loans together with the previous ones granted since 2004 for Polish research, development and innovation projects amount in total to some 7 billion EUR. They contributed to advancing the development of almost every scientific discipline: from quantum optics technologies to supramolecular chemistry and 3D holographic imaging.”
EIB Vice-President Vazil Hudák, responsible for the Bank’s activities in Poland, added: “Supporting competitive and secure energy is one of the EIB’s priorities, so we are glad to finance Energa’s modernisation programme, as it will improve the reliability and quality of electricity supply. The hybrid bonds under the Juncker Plan prove again to be a successful way of innovative financing boosting the investments in the energy sector in Poland. We are also proud to continue our backing to the Polish research and innovation, as they play key role in driving growth in Europe, ensuring its long term competitiveness and creating high-value jobs. We aim to strengthen research, promote efficiency, foster better links between research and industry, and leverage more private investment for applied development and innovation activities in Poland and across Europe”.
Daniel Obajtek, CEO of Energa SA, commented: “The hybrid bonds’ issuance is the third project implemented in cooperation with the European Investment Bank. The funds raised will be allocated to the investment in the distribution segment, to the expansion and modernization of the power grid, including the strengthening of its reliability. This is a priority investment direction for us, which will allow us to provide high quality services to our customers”.
Background information on the agreements:
Energa will use the funds obtained from the issue of hybrid bonds to implement its priority investment programme in 2017-2019. The company estimates the total capital expenditure in this period will be in the range of EUR 814m. Hybrid bonds are innovative due to their equity-type features and partial equity recognition by rating agencies. The main objective of Energa’s programme is to increase the security of electricity supply while limiting network losses and improving the quality of service. The project will also include investments for the connection of renewable energy sources (mainly in low and medium voltage) to increase the hosting capacity of the network. Apart from these tasks, investments in smart meters and network automatization as well as for new connections in the distribution network are also planned.
As for the support for Polish science under the new InnovFin Science – EU Finance for Innovators facility targeting science projects, an EIB loan of EUR 425m will finance the statutory research tasks performed by all categories of scientific and academic staff employed by Polish public universities and research institutes in the majority of scientific disciplines. The EU Bank is lending a further EUR 305m for R&D project grants, which will be awarded by the National Science Centre and the National Centre for Research and Development through open invitations to PhD students, post-doctoral fellows and senior scientists. These projects will concern either basic or applied research and will be implemented in public research institutes, universities and enterprises across Poland. The main objective of this EIB financing operation is to leverage applied R&D carried out by enterprises and the innovative activities of companies, as well as to foster better links between research and industry.
Some 150 000 researchers, technicians and other research support staff work in the Polish public science sector. Both projects will be carried out in 2017 and 2018 and will not only help to maintain current employment in the R&D sector in Poland during this period but, more importantly, will open up a great number of new career opportunities, in particular for young researchers. Together with the 16 previous loans extended since 2004 to co-finance the Polish science sector, the loans signed today underpin the EIB’s long-term commitment to support Polish research, development and innovation programmes for various levels and disciplines.
More information
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. Last year, the EIB provided loans amounting to EUR 4.44bn for Polish projects.
The Investment Plan for Europe focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects. On 14 September 2016, the Commission proposed extending EFSI by increasing its firepower and duration as well as reinforcing its strengths.
InnovFin Science is one of a range of products introduced under “InnovFin – EU Finance for Innovators”, a new generation of financial instruments and advisory services launched by the European Commission and the European Investment Bank Group (EIB and EIF) under Horizon 2020, the EU research programme for 2014-20. InnovFin Science aims at supporting R&I investments by public or private entities such as research institutes, universities and research organizations, including the financing of buildings and other infrastructure directly related to R&I activity. InnovFin Science will be delivered directly by the EIB in the form of debt or equity-type operations from EUR 25m.
ENERGA Group is one of the four largest power groups in Poland and one of the three largest electricity suppliers in Poland. The core business entails distribution, generation and sales of electricity, heat and gas.
Source: The European Commission