05 February 2025
newsletter
poland
Green Guarantees in Poland
The Export Credit Insurance Corporation (Korporacja Ubezpieczeń Kredytów Eksportowych; "KUKE") is the only export credit agency in Poland providing export insurance for trade security in high-risk markets guaranteed by the Polish State Treasury, regulated by the Polish Act of 7 July 1994 on Insurance Guaranteed by the State Treasury.
KUKE offers a wide range of insurance guarantees, such as insurance guarantees for payment of receivables related to letters of credit, supplier credit insurance, buyer credit insurance, forfaiting and insurance guarantees issued at any stage of the export contract execution, as well as other insurance policies for entrepreneurs in politically unstable markets, small-scale entrepreneurs and others.
Recently, KUKE introduced "green guarantees" (zielone gwarancje) (the "Guarantees") as a form of green financing, which aim to increase engagement in ESG-related activities. First, the Guarantees will help companies obtain financing for projects related to energy transitions and climate neutrality investment projects. Second, they will help banks acting as lenders limit the risk related to green investments and increase the scale at which they can operate in such transactions.
KUKE lists such projects as, among others:
- electricity production using low-carbon technologies;
- manufacture of equipment for the production and use of hydrogen;
- infrastructure supporting low-carbon transport, road transport and public transport.
KUKE has announced that in the 2024-2025 period, it will allocate PLN 10bln for the Guarantees alone, with a potential increase if demand proves considerable. It is reported that KUKE's instruments can secure up to 80 % of the value of the financing, so that banks will assume only 20 % of the risk. As a result, the programme could increase the pool of loans for green projects in the Polish economy to PLN 50bln, marking a significant step in Poland's green transition.
The specificity of green projects requires obtaining financial security in an extensive period, which is made possible by the Guarantees, as some of them provide for a financing security period of up to 22 years – a major change from the five- to seven-year market average.
Currently, several Polish banks have already declared their cooperation with KUKE, including Santander Bank, BNP Paribas Bank Polska, Credit Agricole and PKO BP.
The Guarantees provided by KUKE show great potential for enhancing ESG investments, which could prove to be a considerable benefit not only for green companies but also banks, who can now support such endeavours with increased security, as well as the Polish environment as a whole. In addition, it provides for extended crediting capabilities, as banks now have a wider range of potential activity.
authors: Weronika Kapica and Miłosz Zolich
