Poland

Poland
EBRD country factsheet
As at 1 January 2007, the European Bank for
Reconstruction and Development (EBRD) had
signed 158 investments in Poland, totalling
almost €3.7 billion. This has helped to generate
an additional €11 billion from other sources. A
total of 81 per cent of investments are in the
private sector.
E u r o p e
Highlights
During 2006, the EBRD made investments in most sectors with a few
transactions of particular significance.
■
A long-term finance facility to Belchatow Power Plant, to co-finance the
construction of a new 800MW unit, which constitutes an important step to
establishing a competitive energy market.
■
An equity investment in Fagor Wrozamet, a white consumer goods producer,
alongside Spanish investor Mondragón Corporación Cooperativa (MCC).
■
A cross-border, longer-term financing provided for Ukrainian and Russian
subsidiaries of Polish companies (Barlinek and Amica).
Small business support continued to be an important part of the EBRD’s
activities. In 2006, the Bank approved several transactions under the leasing
window of the EU/EBRD SME Finance Facility, expanding the financial products
available under BZ WBK Leasing Facility and SG Equipment Leasing to small
businesses.
The EBRD has also expanded its revenue-backed financing for municipal water
companies in Gdansk and Krakow and provided further investments in private
equity funds in Poland (Nova Polonia Natexis, AIG New Europe Fund etc.).
EBRD commitments by year
€ million
500
400
300
200
100
0
02
03
04
05
06
Small business support
continued to be an important
part of the Bank’s activities.
Latest news
Poland’s Cersanit expands into Ukraine
€80.8 million EBRD loan to establish new production facilities
The EBRD is providing a €80.8 million loan to Cersanit Invest, a wholly owned
Ukrainian subsidiary of the Cersanit Group, the largest Polish manufacturer and
distributor of bathroom fittings and ceramic tiles. Loan proceeds will be used
to finance the establishment of green-field production facilities of sanitary ware
and ceramic tiles in Novograd Volinskiy, in Zhytomyr region of Ukraine. The loan
will comprise €40.4 million for the Bank’s own account, and €40.4 million will
be syndicated to commercial banks.
It is expected that a new plant, once put into operation, be produce around 1
million units of sanitary ware and around 7 million square metres of ceramic
tiles every year. A manufacturing facility in Ukraine will significantly strengthen
Cersanit’s market presence in the country and increase competition in the
>>last page
sector.
Cersanit Invest is the largest
Polish manufacturer and
distributor of bathroom fittings
and ceramic tiles.
Given strong economic growth and expected improvements in
infrastructure, the outlook remains positive.
Background information
13,996
Private sector share in GDP (2005)
75 per cent
National currency
Zloty
Real GDP (1989 = 100)
´ Average, transition countries
n Poland
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Transition indicators, 2006
n Poland
´ Maximum, transition countries ´ Minimum, transition countries
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
Infrastructure
reform
Non-bank
financial
institutions
Banking
reform
Competition
policy
0.0
Trade and
forex system
Given strong economic growth and expected improvements
in infrastructure, the outlook remains positive. The political
situation remains the key source of uncertainty in the near
future. Slowdown in privatisation, political appointments
to state-owned companies, and lack of reforms and
coherent policies towards government controlled sectors
may hamper restructuring. Fiscal reforms will become
increasingly urgent, as the costs of pension reform are
soon to be included in the headline general government
deficit, while any slowdown in growth will expose structural
weaknesses in government finances. Entry to the eurozone
does not appear an immediate priority for the current
government.
GDP per capita in 2006 at current
international US$
Price
liberalisation
Outlook and risks
Polish
Enterprise
restructuring
The current account deficit in 2006 amounted to €5.6
billion, which constituted 2.1 per cent of GDP. This was
above the 1.5 per cent deficit in 2005. Exports rose in
2006 by 19.9 per cent, while imports were up by 21.5
per cent, confirming the continued domestic demand
growth. Foreign direct investment (FDI) increased from
€7.7 billion in 2005 to a record-breaking €11.7 billion in
2006, supported by stronger economic growth and EU
membership. External debt was at around 47 per cent of
GDP at the end of September 2006. International reserves
remained at around 4.5 months of imports of goods and
services in the first three quarters of 2006. The current
account deficit was covered comfortably by inflows of FDI,
complemented by sizeable portfolio inflows.
Official language
1992
External sector
313.9
1991
Real GDP growth bounced back to 5.8 per cent in 2006,
up from 3.5 per cent in 2005, and is expected to stay
at a similar level in 2007. Despite significant investment
growth at around 20 per cent, the economy’s overall
performance is mainly due to high domestic consumption.
Industrial production grew by 7.7 per cent and construction
expanded by 14.6 per cent in 2006, although this growth
is yet to alleviate the strong regional disparities; the five
poorest regions of the European Union are all located in
the country. Unemployment declined to 14.9 per cent in
December from 17.6 per cent a year earlier, but it remains
the highest in the European Union.
Area (‘000 sq. km)
Small-scale
privatisation
Real economy
38.3
1990
Inflation remains low while strong investment flows
contribute to robust GDP growth, but unemployment is still
the highest in the European Union.
Population (in millions)
1989
Performance and prospects
Basic facts
Large-scale
privatisation
Economic focus
The transition indicators range from 1 to 4+, with 1 representing little or no change
from a rigid, centrally planned economy and 4+ representing the standards of an
industrialised market economy.
For more information
Visit the EBRD at: www.ebrd.com/economics
The Bank will maintain a strong focus on enterprise
restructuring and modernisation.
EBRD strategy
As in seven other countries of central Europe, it is
anticipated that in the coming years the EBRD will move
from generating new business in Poland to working with
Polish companies to invest in other EBRD countries further
east.
Operational priorities
Key dates
Latest strategy
Next strategy
2008
Joined EBRD
May 1990
Over the last 15 years Poland has made considerable
progress in the transition process. With about 75 per cent
Norway
of economic activity generated by the private sector, a large
degree of price liberalisation, an open foreign trade regime
and fairly liberal foreign investment conditions, the country
is one of the most advanced transition economies.
The country strategy approved on 25 April 2006 outlined
the following strategic priorities for the Bank in Poland:
Nor th
Sea
Enterprise sector
April 2006
Gulf of
EBRD commitments by sector
Energy
Natural resources, Power
and energy
Financial sector
G. of Finland
Banking sector, Equity funds,
Trade finance, Non-bank FI
Skagerrak
The Bank will maintain a strong focus on enterprise
restructuring and modernisation in order to promote growth
and competitiveness, particularly in the more challenging
Denmark
sectors. The provision of risk capital will increase the
capital base of medium-sized Polish corporates, especially
those seeking either to expand regionally or develop export
capacity. The Bank’s support for the enterprise sector
will include equity or quasi-equity products and limited
recourse finance.
Finland
Bothnia
As at end of 2006
Corporate sector
Estonia
Agribusiness, Manufacturing,
Property/Tourism and Telecoms
Infrastructure
Sweden
of Riga
Municipal andGulf
environmental
infrastructure, Transport
Micro and small
business financing
Kattegat
Baltic Sea
Latvia
Lithuania
Russia
Gdansk
Stettin
Financial sector
The Bank will continue to seek to increase the availability
of finance to SMEs and micro-enterprises. It will be
important to promote new product development such
as asset-backed securities, mortgage bonds, and the
securitisation of asset portfolios. Providing progress
is made, the Bank will be prepared to assist with the
privatisation of the remaining state-owned non-bank
financial institutions, including the Warsaw Stock
Exchange. The Bank will also continue to support private
equity funds and venture capital funds.
Bydgoszcz
Belarus
Warsaw
Poznan
Germany
Lodz
Wroclaw
Gliwice
Czech Republic
Scale (km)
0
Infrastructure and environment
Katowice
Cracow
Ukraine
100
Slovak Republic
The Bank will promote the introduction of schemes that
minimise reliance on sovereign guarantees and increase
Liech.
the supply of long-term capital. The Bank will
also work
with the national and local authorities on projects and
programmes intended to make effective and innovative
use of European Union funds. The Bank will support
restructuring and modernisation of the railways, and will
draw on its experience to further the scope for financing
projects through public-private partnerships, mainly in the
municipal and transport sectors.
Austria
n EBRD office
For more information
Hungary
Visit the EBRD at: www.ebrd.com/poland
San Marino
Slovenia
Croatia
Romania
Bosnia &
Herzegovina
Serbia
Italy
cont.>> Currently almost 52 per cent of tiles and 25 per cent of sanitary ware in
Ukraine are imported. Local production will substitute the supply of Cersanit
products from its plants in Poland and satisfy the increasing demand for
sanitary ware in Ukraine. This expansion will help Cersanit match an expected
healthy growth in the domestic sanitary ware and tiles markets as Ukraine’s
economy develops further.
The transfer of skills and know-how to the local building materials sector should
have a strong demonstration effect in the central Ukraine region which is
suffering from unemployment and a lack of investment, said EBRD Director for
Ukraine Kamen Zahariev.
Contacts
Resident Office
53 Emili Plater Street
Warsaw Financial Center
Suite 1300
00-113 Warsaw
Poland
Tel: +48 22 520 5700
Fax: +48 22 520 5800
According to Dragica Pilipovic-Chaffey, EBRD Director for Poland and the Baltic
states, the Cersanit Invest project will support the cross-border expansion
of the dynamic Polish company to Ukraine, where it has been successfully
exporting its products in recent years. “We hope that the project will be one of
many investments in Ukraine by Polish companies and its success may lead to
increased Polish investments in this country and the region”, she said.
Headquarters
In November 2006, the Bank signed a €40 million loan with Poland-based
Barlinek, a manufacturer of wooden floors, establishing the production facility in
the Ukrainian Vinnytsia.
Country Director
EBRD projects signed in 2006
Project name
Description
Sector
Portfolio
class
Total
Project
EBRD
value
finance (€ million)
(€ million)
Fagor Wrozamet
Restructuring
Modernisation of an existing plant General industry Private
and construction of a new facility
for a white goods company.
17.5
68.8
Nova Polonia
Natexis II
Equity investment in a private
equity fund.
Equity funds
Private
25.0
25.0
AIG New Europe
Fund II
Regional private equity fund
investing in equity and equity
securities of companies in
central and south-eastern
Europe, subsidiary of AIG Global
Investment Group.
Equity funds
Private
11.9
11.9
Krakow Plaszow II
Modernisation and expansion of a
waste-water plant.
Infrastructure
Private
21.9
87.6
BZ WBK Finance and Credit line for on-lending to small
Leasing (EU/EBRD and medium-sized businesses in
Rural Financing
rural areas.
Facility)
Non-bank
financial
institutions
Private
7.0
7.0
Alpha CEE II
Diversified regional private equity
fund dedicated to central and
eastern Europe.
Equity funds
Private
15.0
15.0
Belchatow II
Modernisation of power plant
to bring it in line with EU
environmental standards.
Power and
energy
State
126.1
1,792.1
Gdansk Water
Infrastructure
Company
Comprehensive modernisation of
water and waste-water facilities.
Infrastructure
State
12.3
119.7
Krakow District
Heating Project
Modernisation of heating
infrastructure to increase energy
efficiency and reduce pollution.
Infrastructure
Private
6.3
76.3
EU/EBRD Rural
Financing Facility
Credit line for on-lending to small
and medium-sized businesses in
rural areas.
Bank lending
Private
15.0
15.0
EBRD
One Exchange Square
London EC2A 2JN
Tel:
+44 20 7338 6000
Fax:
+44 20 7338 6100
Dragica Pilipovic-Chaffey
Poland and the Baltic states
(Based in Warsaw)
Tel: +48 22 520 5700
Fax: +48 22 520 5800
Business Group Director
Peter Reiniger
Central Europe, Western Balkans
and Telecommunications,
Informatics and Media
Tel:
+44 20 7338 6668
Fax:
+44 20 7338 7588
New business enquiries
Business Development Unit
Tel: +44 20 7338 7168
Fax: +44 20 7338 7848
E-mail: newbusiness@ebrd.com
Existing project enquiries
Project Enquiries
Tel: +44 20 7338 6282
Fax: +44 20 7338 7848
Email: projectenquiries@ebrd.com
Publications
Tel: +44 20 7338 7553
Fax:
+44 20 7338 6102
Email: pubsdesk@ebrd.com
www.ebrd.com