20th June 2005
Thursday, September 2nd, 2010
Banking on Poland's future
Ivan Pilip is vice-president of the European Investment Bank. In the past he has held a number of ministerial positions in his native Czech Republic.
| Ivan Pilip |
Agnieszka Barteczko: The EIB is intending to lend EUR 3 (zł.12) billion to Poland. What are the forecasts for other new EU members, e.g. the Czech Republic, Slovakia, Hungary and Lithuania?
Ivan Pilip: Following the record amount of loans signed in Poland in 2004, reaching approximately EUR 1.7 (zł.6.9) billion, we expect that the total amount of EIB loans signed in Poland will represent about EUR 2.1 (zł.8.5) billion in the current year.
According to the EIB forecast for 2005-2007, EIB lending in all new member states is set to increase by approximately eight percent annually. In every new member state there is a need to finance projects that will help to upgrade and modernise infrastructure and fulfil commitments, especially in the area of environmental protection. As a result, EIB lending in these countries is expected to grow more rapidly than in the EU15, facilitating their economic catch up process.
However, there are no limits on allocation for the individual new member states. EIB lending is very closely linked to the number and quality of projects submitted for financing.
The bulk of loans to Poland are consumed by investment in transport infrastructure. Is it the same in other new EU states, such as the Czech Republic and Hungary?
EIB financing of transport infrastructure has represented 40-45 percent of all EIB lending in Poland since 1990. In the other new member states the share of EIB lending dedicated to transport infrastructure over the past 15 years correlates almost exactly to the situation in Poland.
What are the most interesting local government projects that the EIB is helping to carry out at the moment in Poland?
These projects are focused on an increase in the quality of life in Polish cities. Projects being implemented by Polish municipalities and local governments cover the improvement and updating of the environmental infrastructure, the upgrading of urban transport, health, education and social housing.
Are there any regions in Poland where local governments are particularly active?
The EIB cooperates mostly with self-financing municipalities and regions. The interest in financing projects by the EIB is evenly distributed cross the country.
What are the biggest loan amounts granted by the EIB to Polish cities?
Since 1994 direct loans amounting to EUR 374 (zł.1,510) million have been signed with nine major cities and other loans for projects worth approximately EUR 200 (zł.808) million are currently in preparation. An EIB loan of EUR 50 (zł.202) million for the modernization and extension of Katowice's infrastructure is the largest project funded by the EIB to date. In addition, the EIB has financed small projects in more than 20 Polish municipalities indirectly by means of global loans through a network of the EIB partner banks in Poland.
When will the negotiations concerning the construction of the A-1 motorway be finished?
The negotiations are progressing and we expect that they will be finished by the end of June 2005.
Is the EIB considering opening an office in Central Europe?
For the time being there is no EIB office in any of the new member states. In the near future, the EIB plans to open a representative office in a capital of the countries that joined the Union on May 1, 2004 and it was decided that this office would be located in Warsaw.
To what extent do you think the scale of EIB loans to Poland reflects the country's economic development?
High demand for investments in Poland is, naturally, closely linked to under-investment by the previous regime. The EIB could, of course, provide yet more resources for the implementation of Polish projects. However, one has to find a balance between investment needs, an affordable level of debt and the number of quality projects. Obviously, the trend to increase EIB lending in the country is obvious. In 2004 the amount of loans signed in Poland increased by 25 percent compared to the previous year and in 2005 we expect a similar growth rate.
The EIB also combines its lending with EU subsidies and financing provided by other international financial institutions, such as the European Bank for Reconstruction and Development. For example, Poland is entitled to grants from the EU Structural and Cohesion Funds amounting to about EUR 12 (zł.48) billion from 2004 to 2006. This represents around two percent of the country's GDP. The EIB can provide the financial resources needed for co-financing projects with these EU Funds, thus contributing to the successful implementation of Poland's National Development Plan.
Are entities in Poland addressing the EIB themselves or is it rather the case that the EIB seeks out potential borrowers?
Both approaches are widely used. The EIB is in close contact with all relevant public and self-governing institutions and bodies in Poland and the bank is also frequently addressed by representatives of municipalities, industry and foreign investors with requests for project financing.
Interview by
Agnieszka Barteczko
From Warsaw Business Journal by Agnieszka Barteczko
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