Bank Pocztowy is a retail bank in Poland, serving predominantly individual clients and SMEs. Thanks to their strategic partnership with the Polish Post, who owns 75% of shares, they have access to an impressive network of 4,700 branches across the country. Recently the bank decided to support projects in renewable energy.
To start off, can you please explain Bank Pocztowy’s involvement and interest in the energy sector?
We have a very specific set up in place because the Polish Post is our main shareholder - a great advantage if we consider how recognizable the brand is and their broad network of branches.
The idea to support energy projects is one I advocated for when I became a member of the board, because I had previous experience in the sector. Our strategy is to serve private individuals and SMEs. Energy as you know is a very capital intensive business and we are relatively small compared to other banks in Poland, so it does not make much sense to support large investments.
What makes an ideal candidate for Bank Pocztowy to finance? Are you focusing on certain technologies for instance?
The current policy favors installations up to 1 MW, precisely the type of investment we want to support. We are talking mainly about small PV installations for SMEs, with values below 1 million euro. Another lane we want to prioritize is energy efficiency for households - the potential here is incredible.
The renewables sector in Poland has seen many ups and downs in the past - why do you think now is a good time to invest?
The situation in renewable energy was indeed shaky in the past when the government led a “hold-on” type of policy. But this is no longer the case, the doors have become widely open and there are several reasons I credit for this betterment.
Polish people have a strong culture of ownership which explains why they are so open to install PVs in their private homes. They are also more and more aware of climate change and its consequences - the quality of air in Poland is very problematic for instance, and felt by everybody.
Another key point is that energy policies have become more supportive of this segment. Needless to say, good regulation is paramount to open access to the grid and set in place a friendly process for prosumers. And lastly, the auction system had a positive impact because it stabilized investments in energy.
During December’s auction two PV projects won in the basket above 1 MW. Do you expect large PV projects will gain momentum in the near future?
My personal belief is that PV installations are best suited for small production purposes. For the time being, power generation is Poland relies heavily on big production units and this comes with a particular set of challenges.
There is a real danger of blackouts during summer time for instance, because we do not have enough water to cool off plants and this affects prices as well. We paid as much as PLN 1,000/MWh at times during peak hours. This is where PVs can play a role, by ensuring individual supply.
What do you see as common risks associated with financing PV projects?
Broadly speaking they bear the risks associated with any other industry, like unpaid loans. What is particular about the energy sector is that it has a higher sensitivity to regulation, the policy can change unexpectedly as was the case with wind energy. Prices can also go down and threaten the revenues of our customer.
That’s why as a bank we are doing our best to mitigate some of this risks. A good example is an agreement signed in April 2020 between Bank Pocztowy and BGK Bank in which we give an opportunity to use loan for purchase and set-up of micro-installations of a renewable energy source, such as solar panels.
In terms of objectives, what can we expect from your side in the coming two-three years?
One objective that I would like to highlight is our desire to work closer with the government. Banks in Poland are digitalized and like to make use of modern technology, which means they can serve government programs effectively.
Allow me to provide an example: the Clean Air program has been rather unsuccessful so far, partly because of the efforts it takes to evaluate candidates. For them this is something new whereas for a bank it is the daily bread. And with the technology available now we can easily coordinate the process between us and government bodies. We opened the discussion in this sense already and I hope we can reach an agreement.
Do you have a final message for our international readership?
The investment boom in Poland is just beginning, this is the message that I want to stress. Our production structure will change, there is no way around it, and the market is willing and ready to adapt.
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