PKP Cargo (former Project Tamarind)



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

01 Oct 2013



PSD disclosed:

09 Oct 2013

Project Description

The project involves an equity investment by the Bank in the Initial Public Offering (“IPO”) of PKP Cargo S.A. (the “company”) and its listing on the Warsaw Stock Exchange (“WSE”) through the subscription to existing shares offered by the current sole shareholder (PKP S.A.) in the company’s partial privatisation process (PKP S.A. is owned by the Polish State). Up to 50 per cent minus one share in the company will be privatised in a public offering (with all company’s shares to be listed on the WSE) while 50 per cent plus one share will be retained by PKP S.A.

The IPO of PKP Cargo is the introduction of private ownership in the company, which will be achieved by this partial privatisation. The Bank’s participation is expected to improve the company’s corporate governance, support the restructuring and improvement of performance standards. The IPO is a landmark transaction in the rail sector in Central and Eastern Europe.

Transition Impact

The main transition impact of the project will derive from:

(i) More widespread private ownership
The project will bring more widespread private ownership in Poland in the sector, which has to date been the exclusive remit of the Polish State. The partial privatisation of PKP Cargo will be the first company of the PKP Group to undergo an IPO, and may pave the way for other subsidiaries of the Group to follow suit.

(ii) Setting of standards for corporate governance and business conduct
The project will contribute to a substantial improvement of ther corporate governance standards at PKP Cargo. The company is committed to complying with the full Warsaw Stock Exchange corporate governance code. In addition, a change in the Articles of Association and the by-laws will reinforce the autonomy of the process by which any new management board members would be recruited and ensure that this is done through a competitive and transparent selection process in accordance with the nomination procedure to be introduced to the company’s charter prior to the IPO (the registration of such changes to take place after the IPO).

(iii) Demonstration of new and replicable behaviour and activities
The project will be the first example of a partial privatisation by means of an IPO to be carried out in the rail sector in the region. The success may encourage other government to privatise their cargo and/or freight businesses.

The Client

PKP Cargo is the national provider of rail freight services in Poland and the second largest freight operator in Europe. The company’s only current shareholder is PKP S.A., a railway holding company entirely owned by the Polish State Treasury which holds 100 per cent of PKP Cargo’s shares.

EBRD Finance

Equity investment of up to 7.5% of the total number of shares in the share capital of the company, the exact number to be determined on subscription and subject to acceptable level of the share price and fulfilment of certain conditions precedent.

Project Cost

The total project value amount will be determined at the time of the stock market listing.

Environmental Impact

Categorised B.

An independent environmental audit assessment of the company was completed as part of the pre-privatisation study on request of PKP S.A. in 2010. As part of the current project, the Bank undertook additional Environmental and Social Due Diligence (“ESDD”), this included a corporate review and a series of site visits by the Bank.

The ESDD identified that some additional resources and procedures are needed to achieve compliance with the EBRD’s Performance Requirements.

An Environmental and Social Action Plan (“ESAP”) has been developed to address environmental and social issues identified during the ESDD. A Corporate Stakeholder Engagement Plan will be developed under the ESAP and publicly disclosed. Thecompany will provide to EBRD annual reports on the implementation of the ESAP and environmental and social performance. The Bank will monitor the company’s compliance with the agreed environmental and social commitments through reviewing these reports and periodic monitoring visits.

Technical Cooperation


Business opportunities

For business opportunities or procurement, contact the client company.

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General enquiries

EBRD project enquiries not related to procurement:
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