Agencja Rozwoju Przemysłu S.A. will create green assets investment fund

Date of posting: 2023-03-13

Today, the Management Board of Industrial Development Agency JSC (ARP SA) signed an agreement to purchase an Investment Fund Company (TFI) from KGHM Polska Miedź JSC. It is one of the most important strategic initiatives in the new Strategy of Industrial Development Agency JSC for 2023-2025 with the perspective to 2030 entitled "ARP. CLEAN INDUSTRY" adopted in December 2022.

In the following months, ARP TFI will apply to the register court to enter the first "Polish Green Fund by ARP" into the register of investment funds. The fund will raise funds from both the Industrial Development Agency and Polish and international financial institutions (public and private) interested in exposure to the green transformation and energy decarbonization of the Polish economy as well as green construction and modernization of assets in Poland, which is 6th in the EU and 23rd economy in the world.

The Polish Green Fund by ARP (PGF) will be an infrastructural investment fund in green and transforming assets that will make Poland independent of hydrocarbons (green infra fund). PGF will take into account the regulations of the SFDR (Sustainable Finance Disclosure Regulation), in particular, Art. 8 and 9.

The Polish Green Fund, managed by ARP TFI, under a specific investment policy, will invest i.a. in the transformation and decarbonization of Polish local district heating and other municipal installations of local government units, generation and value chain of offshore and onshore wind energy, solar energy, green chemistry, circular economy solutions and green industry (from energy efficiency through access to green energy to decarbonized logistics).

"Poland must become more and more energy sovereign. It is not only about key, large-scale installations that determine the strength of entire power grid systems but also about smaller installations, built and modernized locally, important for our small homelands. The Polish Green Fund intends to cooperate closely with local government units to make municipal services greener, especially heat provision. We have both technological ideas analyzed and developed with industry-related partners and financial instruments, of course. We will invest in green generating capacities and value chains, enabling this grand "green jump" ahead of us. The logic is simple: the green market transformation must pay off - for investors (rate of return), contractors and installers (fair margin), recipients-users-customers. Our top priority is to provide a good, stable price for clean energy, heat, and other utilities and products, independent of the madness of prices of coal or natural gas, what after a year of war in Ukraine we understood as never before" - says Cezariusz Lesisz, President of the Management Board of ARP SA.

"The Industrial Development Agency has been known for over 30 years for financing the Polish economy, primarily in the debt formula, through loans. It also has a portfolio of industrial companies in various industries and sectors in various parts of Poland. It organizes industrial parks for strategic investors who are increasing, from the map of the whole world, choosing Poland. The new Strategy of ARP SA for 2023-2025 with a perspective to 2030 is entitled "CLEAN INDUSTRY" which means transparent, based on clear rules, more and more effective, and also in terms of energy. This awareness guides the Agency in managing companies within the Capital Group and organizing areas and space for new investors who pay attention to the need to use green energy. The Polish Green Fund, through investments in the new assets, will be a key tool, an investment vehicle, enabling investors from around the world to achieve green market exposure to the great changes that lie ahead of us." - notes Izabela Antos, Undersecretary of State at the Chancellery of the Prime Minister, supervising, among others, Department of Development Instruments.

"The Polish Green Fund (PGF) as an infrastructure investment fund will invest long-term - the tenor of the fund will be 10 years, and its structuring in terms of both projects selected for the portfolio, financial instruments, and risk management policy will allow us to offer Polish and international investors an exciting exposure to Poland's green transformation, one of the largest economies in this part of the world, within the stable framework of the European Union.

As an infrastructure fund, PGF will invest in proven solutions and hard assets (risk management), constituting a natural hedge against geopolitical volatility, inflation, or shocks on listed capital markets, with relatively attractive rates of return in the long term. Our offer addresses a diverse group of public and private professional fund investors, Polish and international.

However, we will also pay special attention to new solutions that will mature in time and be able to be scaled in different parts of Poland - I mean, for example, the hydrogen economy and its value chain, the biogas industry, CCSU or the industry developing technologies as part of the energy value chain of nuclear power. However, we are not a venture capital fund and will certainly not be able to be involved from the beginning of this kind of investment. However, we know that many breakthroughs and technological successes lie ahead of us, which is why we must and will keep our finger on the pulse," - adds Prof. Tomasz Gackowski, Managing Director of ARP SA.

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