International cooperation

2018 marks the beginning of our efforts to open BGK’s representative offices abroad.  Representative offices, set up in the largest global financial hubs, have goals related to building a strong image of the Bank as an important partner for foreign financial investors. Also, activities carried out by the offices facilitate internationalisation of Polish enterprises by identifying new business opportunities. A particularly valuable aspect for the Bank is the ability to establish direct relations with international financial institutions present in the countries where the representative offices are located. Thanks to the activities of the representative offices, it was possible to establish and strengthening links with such institutions as KfW, Helaba and NRW.Bank. Representatives provide the Bank with expertise on the target markets of the offices, they organise workshops of experience sharing between BGK’s employees and partners from foreign institutions. Their goal is to promote the social and economic activity of Poland and the Bank, support the Bank’s head office and regions in coordinating and maintaining relations with partners and stakeholders abroad. BGK has four representative offices in Europe.

• Representative office in Brussels 
• Representative office in Frankfurt am Main 
• Representative office in London
• Representative office in Amsterdam

Internationally, in 2021 BGK regularly collaborated with the following groups of public entities:

1. the European Commission (EC),
2. international financial institutions,
3. foreign banks and development institutions,
4. international associations,
5. diplomatic establishments.

On 25 June 2021, drawing on the potential of opportunities resulting from the European Commission’s Pillar Assessment accreditation received in 2020, as a result of which the Bank obtained access to EU funds and a budgetary guarantee under direct management, BGK submitted its offer to the European Commission for becoming an implementing partner of the InvestEU Programme. The offer was positively reviewed by the Commission and terms of the guarantee agreement with the EC are currently being negotiated. The guarantee agreement is expected to be signed by the end of the second quarter of 2022. Concurrently, the Bank has undertaken extensive efforts to prepare it for the new role of an implementing partner of the InvestEU guarantee fund. The Bank plans to use the InvestEU guarantee facility as a risk-sharing instrument for new products addressed to the following market segments: transport, renewable energy, digitisation.

Also, following the accreditation by the EC, work was commenced on building competences in the area of development assistance to use instruments financed from EU development funds (NDICI).

The successful pillar assessment carried out by the European Commission enabled BGK to sign an agreement with the European Commission on 13 December 2021 on activities relating to delivery of COVID–19 vaccines to Eastern Partnership countries: (Ukraine, the Republic of Moldova, Georgia, Armenia, Azerbaijan). The agreement was signed by Olivér Várhelyi, the EU Commissioner for Neighbourhood and Enlargement, Zbigniew Rau, the Minister of Foreign Affairs of the Republic of Poland, and Beata Daszyńska-Muzyczka, the President of the Management Board of BGK. The received grant of EUR 35 million will be used to finance and deliver from 2 to 10 million doses of COVID-19 vaccine to those countries. The project is implemented together with the Ministry of Foreign Affairs of the Republic of Poland and the European Commission’s Directorate-General for European Neighbourhood Policy and Enlargement Negotiations. The Ministry of Foreign Affairs coordinates EU’s efforts related to the provision of vaccines to Eastern Partnership countries, while BGK implements the grant, fulfilling all tasks related to the management of the funds received, and acts as the payment agent.

In 2021, BGK continued its cooperation with the EIB by entering into five new agreements.

The first one is a new loan facility as part of the Municipal Facility & COVID 19 Response programme, amounting to PLN 700 million, signed in May 2021. Loans under the facility may be taken out by medium-sized cities (with a population of up to 100,000). The funds received from the EIB will enable financing of investment projects supporting general development of cities, involving, inter alia, action on climate change and sustainable transport, as well as projects directly related to mitigation of adverse effects of the COVID-19 pandemic.

In September 2021, BGK executed an agreement on Social & Affordable Housing for PLN 600 million. The loan will be earmarked for financing of social housing.

The third agreement, concluded in October 2021, provided for a loan for S6 Tri-City Ring Road, which will co-finance the construction of a new ring road around the Tri-City. The loan from the EIB totalling EUR 240 million will enable the construction of a 39-kilometre road section that will improve road connections in the Tri-City and facilitate access to ports in Gdynia and Gdańsk. The EIB loan proceeds will be transferred to BGK’s National Road Fund (NRF), which finances the construction and alteration of national roads in Poland, in particular motorways, expressways and ring roads.

In November 2021, an agreement was signed for the financing of Tramwaje Śląskie S.A. in the amount of PLN 218 million. The proceeds of the loan will be used on projects involving modernisation and extension of the tram infrastructure as well as purchase and modernisation of tram rolling stock.

In December 2021, the Bank signed an agreement for the S14 Lodz Western Bypass loan in the amount of EUR 200 million, which will be used for co-financing of construction of an approximately 26-kilometre section of the western bypass of the city of Łódź along the S14 expressway. Construction of the road will enable moving transit traffic and most of heavy traffic out of Łódź, Pabianice, Zgierz, Konstantynów Łódzki and Aleksandrów Łódzki. At the same time, it will shorten travel time and improve the comfort and safety of travel in the region. Ultimately, S14 will connect the S8 expressway in the south with the A2 motorway in the north. Proceeds from this loan will increase the NRF.

In 2021, BGK also continued the allocation of funds under the Multi-Beneficiary Intermediated Loan V contract from 2016 for EUR 125 million. The funds secured under the EIB’s global loan are used to finance investment projects implemented by local governments, SMEs and mid-caps.

In 2021, BGK and the EIF signed an agreement on counter-guarantee for lease guarantees. The EIF’s counter-guarantee is based on the resources of the Pan-European Guarantee Fund. The Fund is an additional source of support, next to the EU budget. It was established from funds of some Member States, including Poland, which are shareholders of the EIB.

The portfolio guarantee for leases supplements the existing offer of BGK’s portfolio guarantees for SMEs related to fighting the consequences of the COVID-19 pandemic.

In addition, as part of counteracting the effects of the COVID-19 pandemic BGK extended the validity of the COSME COVID-19 WINDOW programme until 31 December 2021, thus extending the preferential terms of the COSME guarantee for working capital loans offered to Polish businesses (i.e. reduced commission and extended guarantee term).

In 2021, BGK also continued its activities within the framework of the EUR 90 million Polish Growth Fund of Funds established together with the EIF. The Fund invests in private equity funds which provide funding to business entities at the stage of growth or expansion.

Cooperation with the EIF is also implemented at the “ownership” level. Following the acquisition of additional three shares in the EIF in 2021, BGK currently holds eight shares in the EIF and is its only Polish shareholder.

In 2021, BGK developed bilateral and multilateral relations with development banks and institutions from other countries. In connection with the COVID-19 pandemic, international communication was generally carried out using remote means, while the organisation of most events, including official visits of BGK’s foreign partners, working and study meetings, as well as conferences and training sessions, was reduced or postponed until 2022.

Despite the difficulties resulting from epidemic restrictions, members of the BGK Management Board completed 17 foreign missions in 2021. They held numerous meetings at governmental level and with representatives of partner institutions, most of them in the Three Seas Initiative countries. Talks were related to the countries’ involvement in the development and operationalisation of the Three Seas Initiative Investment Fund (3SIIF). The Management Board members also attended many conferences, including an online conference “Why Poland now? Attractive destination for energy and infrastructure projects!” organised by the Polish Investment and Trade Agency and the Embassy of the Republic of Poland in Tokyo, in cooperation with Keidanren, JETRO and Shokokai, the “Invest in Three Seas” event in Tallinn, and the Bled Strategic Forum, where BGK was a partner.

On 23–24 November 2021, BGK organised a study visit for development banks and institutions from Central and Eastern Europe. It was attended by the representatives of the Bulgarian Development Bank, Eximbank Romania, Eximbank Hungary, Fuchs Asset Management, HBOR, NRB and VIPA. The purpose of the visit at BGK was the presentation of selected aspects of BGK’s activities, including treasury operations and debt financing, internal audit and matters related to sustainable finance.

In 2021, BGK’s delegation participated in the Poland-Qatar Economic Roundtable in Qatar and the Polish-Arab Economic Forum on EXPO Dubai, where representatives of the Bank presented its financial solutions and its activities on capital markets. BGK was an official partner of the event organised by the Polish Investment and Trade Agency. The Forum was held to promote Polish products and services in Middle Eastern markets.

Despite restrictions related to the COVID-19 pandemic, BGK took steps to establish or strengthen existing cooperation, including through experience and knowledge sharing, with KfW IPEX-Bank, Japan Bank for International Cooperation (JBIC) and Nordic Investment Bank (NIB). In cooperation with the Italian development bank Cassa Depositi e Prestiti (CDP), as part of an inter-institutional programme for exchange of experience, employees of both organisations shared their expertise and best practices in the area of international cooperation, HR, implemented projects and financial regulations. In October 2021, delegations of the Development Bank of Kazakhstan, DAMU Entrepreneurship Development Fund JSC and Baiterek National Managing Holding JSC were received at the registered office of BGK. The meeting participants discussed the possibility of developing cooperation between the institutions.

In 2021, BGK intensified cooperation with the EBI and top five development banks in Europe (CDC, CDP, ICO and KfW – the Big 5+1 Group) as part of JICE (Joint Initiative on Circular Economy), whose goal is to accelerate the transition to sustainable closed circuit economy by launching innovative and environmentally friendly projects worth at least EUR 10 billion in 2019–2023. A measurable achievement of BGK under JICE was a webinar entitled “Circular Economy in the Building Sector” organised on 20 October 2021 in cooperation with KfW and the EIB, which touched on various aspects of closed circuit economy in the construction sector. The event gathers several hundred participants from different parts of Europe, focusing on the idea of closed circuit economy.

Moreover, a meeting of CEOs of the Big 5+1 group member banks was held in September 2021 in Rome, organised by CDP, and a meeting of CEOs of banks of the European Long-Term Investors Association (ELTI). The most recent event in Rome was the conference “Financing Infrastructure For The Recovery: The Role of Public-Private Cooperation to Ensure a Long-Term Sustainable Growth.”

In the area of development and operationalisation of 3SIIF and cooperation with foreign financial institutions, the Management Board of BGK in 2021 also conducted an active dialogue with representatives of Polish and foreign diplomatic establishments and government administration.

In November 2021, BGK became a partner of and established cooperation with the World Economic Forum, an international organisation for the most influential political, business and social organisation actors. The Forum’s mission is to shape global agenda of the most important global challenges and problems. In 2021, Beata Daszyńska-Muzyczka, President of the Management Board of BGK, took part in several panels of the Trade, Investment and Development Agencies group on cooperation aimed at ensuring post-pandemic economic recovery and accelerating regionalisation of trade and investment flows. BGK’s President also became a member of the Trade and Global Economic Interdependence Leadership group of top business leaders and trade ministers, which sets directions of global cooperation in the area of international trade. She was one of 25 representatives of business who participated in formulating guidelines that set priorities for the next ministerial conferences of the WTO.

It is a development programme aimed at preparing employees to perform tasks in our representative offices. We launched it in 2021 with the intention to develop skills related to work in the international environment and to consolidate knowledge of macroeconomics and international financial institutions, and to improve the understanding of our financial solutions.

For more information see: https://3siif.eu/