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EBRD announces support for Polish mass privatisation programme
At a recent meeting in London with Waldemar Pawlak, the Prime Minister of the Republic of Poland, Jacques de Larosière, President of the European Bank for Reconstruction and Development (EBRD) announced that the EBRD has approved its first project in support of Poland's Mass Privatisation Programme (MPP).
Mr de Larosière said: "We had an extremely constructive discussion and I expressed the Bank's support for the MPP, for which we are very pleased to be able to offer this initial assistance". He added that the Board of the Bank had also welcomed a number of initiatives designed to provide debt and equity support alongside Polish institutions to companies in the Programme.
Loans of up to US$ 3.2 million each, worth in total US$ 54.4 million, will be extended to each of the National Investment Funds (NIFs) which will be capitalised with shareholdings in companies entering the MPP. The loans will finance early operating expenses of the NIFs before these can be met by cash flow from the companies' operations. This solution uses techniques of limited recourse financing to fill a gap in the MPP funding structure and hence to reinforce the independence of those managing the transformation process.
The other initiatives being worked on by the EBRD will improve the access of companies in the MPP to debt and equity finance, both directly from the EBRD and through co-investment arrangements to be concluded with financial institutions in Poland. These new initiatives will enable the EBRD to increase its commitments to Poland for which the Bank has approved ECU 650 million of private sector projects to date. It is hoped that this total will double over the next few years with a substantial proportion being directed to MPP companies.
Mr Pawlak and Mr de Larosière also reviewed other aspects of the Bank's current and future operations, particularly in the restructuring of enterprises, the strengthening of transport infrastructure and the requirements for attracting private sector investment into the power industry.
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