As the EBRD President visits Warsaw, we look at the Bank’s work in the country
For many years Poland was a frontrunner in change and reform. It was here in 1980-81 that the independent trade union Solidarność quickly became a mass movement against communism that eventually the state could no longer repress.
After the fall of the one-party state in 1989, Poland was the first country to introduce a radical economic “shock therapy”. And it was in Poland that the newly established EBRD signed its first project in May 1991.
The fact that the loan agreement with Wielkopolski Bank Kredytowy (WBK) in Poznań was denominated in ecu serves only to illustrate how much has changed since then. The euro has long since replaced the ecu, but Poland has arguably undergone even more profound change.
A state-dominated and centrally planned economy that suffered from chronic inefficiencies, underperformance and shortages has been exchanged for one of the most vibrant and dynamic economies in Europe and beyond.
These changes show that reforms, although often difficult and painful, have served Poland well. These achievements must not be squandered as they provide the country with sound foundations on which to build further progress.
Today, Poland is the sixth-largest economy of the European Union, which the country joined in 2004, committed to the EU’s values and aspirations. Poland was determined to reinforce its position at the centre of the continent and use its potential to become a bridge between east and west as well as between north and south.
It is testimony to Poland’s economic resilience that it was the only country in central and eastern Europe that did not suffer a recession after the global financial crisis of 2008-09.
However, this severe economic shock also illustrated in Poland areas where more reform was needed. One such area was the strengthening and deepening of the local capital market, where the EBRD was able to offer not only its funds, but also technical assistance and policy dialogue aimed at creating a supportive environment.
In many cases, the EBRD was – and remains – a pioneer, for instance with its engagement in the issuance of the first covered bonds on the Polish market and the development of legislation for real estate investment trusts.
Another key area for Poland is energy. A large country with a population of almost 38 million, it also has an enormous demand for power and electricity. While to a large degree this demand is still being met by coal-powered plants, there is a growing awareness that the energy mix in Poland needs rebalancing.
There is strong potential in renewables, not just in onshore wind generation, but also in biomass, solar and offshore wind power. The EBRD remains committed to existing wind projects, under difficult circumstances, and prepared to invest further in viable new projects. In parallel, the Bank supports energy savings and efficiency measures with dedicated credit lines.
Overall, the EBRD has invested more than €8.6 billion through 388 projects in Poland to date. Appetite remains significant, which is also reflected in the fact that during 2016 alone the Bank signed new commitments worth €776 million, making Poland the EBRD’s third-largest country of operations.
Meanwhile, the EBRD’s relationship with WBK continues and its development illustrates the Bank’s changing role in Poland. The first loan to WBK in 1991 was provided for on-lending to local small and medium-sized enterprises in less-developed regions.
When WBK was privatised in 1995, the EBRD became a shareholder. Years later it was merged with Bank Zachodni and, under the name BZ WBK, became Poland’s third-largest bank and part of Grupa Santander.
Last year, the EBRD provided BZ WBK with a loan to finance investments that will improve the energy and resource efficiency of residential buildings. Throughout this process of constant change and adaptation the EBRD has been able to serve as a partner who can provide stability and continuity.