The new KUKE guarantees will make it easier for Polish companies to finance energy transition expenditures and investment projects aimed at achieving net-zero climate goals, and they will also help banks to reduce their risk and increase their lending capacity in regard to funding green transition
New KUKE guarantees will help Polish companies finance expenses related to energy transformation and carry out investment projects aimed at achieving climate neutrality for the economy. They will also assist banks providing loans for green investments by reducing their risk and enabling a multiple increase in the scale of lending activities.
KUKE has introduced instruments that secure the repayment of financing provided by banks for the green transformation of Polish companies. These “green” guarantees will apply to a wide range of investments that contribute to mitigating climate change. The new solutions from KUKE aim to encourage banks to increase financing for the energy transformation of the Polish economy and to mobilize additional funds for this purpose from foreign sources as well.
According to the latest assumptions from the Ministry of Climate and Environment, the cost of the transformation outlined in the updated National Energy and Climate Plan by 2030 will amount to nearly PLN 800 billion. A report published this year by UN Global Compact Poland, titled “Green Finance in Poland,” points to an investment gap in the economy of up to EUR 1.9 trillion by 2050.
“Poland needs clean and affordable energy to maintain its fast economic growth and to ensure that domestic companies can continue to compete effectively in global markets. Therefore, our goal is to accelerate the energy transformation, which requires the mobilization of additional financial resources. The availability of these resources will encourage companies to invest in green technologies. The best, proven, and budget-neutral tool for this is state guarantees for the banking sector, which alleviate concerns about financing the climate transformation of their clients. KUKE, which already successfully guarantees credit repayments for exporters, is responsible for working with banks and issuing these guarantees” – Jacek Tomczak, Deputy Minister of Development and Technology.
KUKE has developed the mechanism for these new instruments and the model for cooperation with banks over the past few years, offering guarantees for investment and working capital financing provided to Polish exporters for domestic projects. The maximum guarantee level is 80% of the loan value, meaning that a bank using this solution can increase its client financing capacity by five times. In 2023, the value of loans guaranteed by KUKE reached PLN 2.5 billion. Currently, all major corporate banking institutions in Poland are using KUKE guarantees.
KUKE is one of the first export credit agencies in the world to support the climate transformation of the national economy. Previously, these agencies focused on financing the operations and development of domestic exporters.
“The green investment guarantees are an innovative solution through which KUKE will contribute to modernizing the economy and strengthening the competitiveness of Polish entrepreneurs in a completely new area. In addition to its traditional activities in trade credit insurance, both domestic and export, KUKE has added groundbreaking instruments in recent years, supporting domestic exporters’ investments, ensuring liquidity, integrating producers into global supply chains, and attracting foreign investments. Now, KUKE is dedicating its resources and expertise to addressing the biggest challenge facing Poland’s economy in the coming decades: the energy transformation. KUKE guarantees are available to all companies, whether they need to adapt to new regulations and want to reduce their negative environmental impact to meet the Fit for 55 requirements, or they are aiming to carry out projects, especially in the energy sector, that will shift our economy toward green solutions. Our proven model of cooperation with banks allows us to believe that we will achieve significant scale in this area quickly. This year alone, we can issue guarantees worth up to PLN 10 billion” – Janusz Władyczak, President of KUKE.
KUKE offers two types of “green” instruments: guarantees for the repayment of financing for medium- and long-term investment projects, and guarantees securing the repayment of short-term obligations to suppliers and financial institutions by companies making significant contributions to mitigating climate change. Both domestic and foreign financial institutions can benefit from KUKE’s support program.
“The value of investments needed in the economy to combat climate change exceeds the financial capacity of the domestic banking sector. KUKE’s role will therefore be twofold. Credit risk-reducing guarantees act as leverage, allowing banks to increase the limit of funds available to companies by up to five times. Additionally, through longstanding cooperation with international financial institutions, including commercial and development banks, we will attract foreign capital dedicated solely to transformation efforts. Having access to their own financing for projects, such as offshore wind farms, strengthens our position and increases the local content of investments” – Adam Winogradzki, a member of KUKE’s board.
KUKE’s guarantees for green investments can cover loans with very long repayment periods (over 20 years) and a minimum value of PLN 10 million. The program does not require allocation of state budget funds, as it is implemented within the limits set for KUKE.
Source: KUKE
