Support for Polish exports and foreign expansion

Bank Gospodarstwa Krajowego plays a crucial role in providing Polish companies with solutions enabling them to effectively compete in international markets, in particular in high-risk markets. These markets offer high business potential for Polish exporters. However, but due to these increased risk commercial financial institutions do not provide them with the support they need.

This is why Polish companies, when exporting to or investing in countries where the political and economic situation is less stable, seek support of BGK – the Polish development bank. The Bank enables them to fully use their potential in the markets of their interest, by providing them with, among other things, export support instruments under the Financial Exports Support government programme. The instruments include, inter alia, confirmation, discount and post-financing of letters of credit, loan advanced to the buyer’s bank, loan advanced to the buyer and export pre-financing loans.

BGK also supports Polish investors pursuing projects outside the domestic market, including foreign acquisitions and brownfield or greenfield projects. A characteristic feature of this type of financing is that the loan is primarily secured by foreign assets (of the project/foreign entity).

The Bank’s particular interest in this area was reflected in one of the pillars of the BGK strategy for 2021–2025, namely the “International Cooperation and Business”.

Export and foreign expansion financing

BGK plays a crucial role in providing Polish companies with solutions enabling them to effectively compete in international markets. Each year, the Bank has been increasing its exposure to export financing and foreign expansion instruments granted both under the Financial Exports Support Programme and as part of the Bank’s own activities. Despite the pandemics, in 2021 BGK continued to carry out its activities related to foreign expansion, i.e. supporting exports, but also financing projects implemented by Polish businesses in international markets. In 2021, BGK supported transactions/projects of Polish enterprises in four new markets (Bahrain, Chad, Ethiopia, Estonia), thus in 2021 it provided financial support to Polish businesses in a total of 76 countries.

Financial Exports Support programme

BGK supports Polish exports by advancing export credits under the Financial Exports Support government programme adopted by the Council of Ministers in 2009. BGK provides credit facilities to foreign buyers (directly or through the buyer’s bank) to finance the purchase of Polish goods or services. The funds are transferred directly to the bank accounts of Polish exporters, Which eliminates the risk of default, as the Polish business receives the transfer directly from BGK.

The solutions offered under the programme are considered particularly attractive on higher risk markets, where the solutions offered by commercial banks are limited and the borrowing costs charged by local banks are high.

Since its launch until the end of 2021, BGK granted loans for an aggregate of approximately PLN 5 billion as part of the Financial Exports Support programme. The amount disbursed by the end of 2021 was approximately PLN 4.2 billion, while the value of supported export contracts was about PLN 6 billion.

BGK’s own activity in supporting exports and foreign expansion

In recent years, Polish companies operating in foreign markets began to seek the available financing options more actively. To meet the needs of enterprises, in 2015 BGK expanded its product offer to include loans for which Polish enterprises may apply if they undertake foreign investments. Such a financial instrument is complementary to the available export credit products and to products offered by other financial institutions. The significant increase in the amount of loans granted in subsequent years confirmed that this form of support is needed by Polish enterprises. BGK enter the markets of highly developed countries through various forms of financing. The expansion of the product offer also affected the geographical diversification of BGK’s portfolio and enabled Polish businesses to secure attractive forms of support in relation to exports and when planning expansion into foreign markets.

The amount of exports and foreign expansion financing provided by BGK in 2021 (under the Financial Exports Support Government Programme and as part of own activities) totalled PLN 3.6 billion. BGK supported more than 200 transactions and foreign projects of Polish companies, including the financing of: sale of semi-trailers to Mali, sale of medical equipment to India, sale of chemical products to Ukraine, sale of food products to China, acquisitions in USA and an investment project in Chile.

The geographical scope of transactions/projects of Polish enterprises supported by BGK since 2014:

Financial support of exports / foreign expansion

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The map shows the situation as at 31 March 2022.