INNOVATIVE FUNDING OF RENEWABLE ENERGY

The shareholders of Megawatt OMS – the owner and operator of the farms in Tychowo and Kukinia is the Marguerite Fund together with RP Global, the Austrian group investing in renewable energy (the distribution of shares is 49.99 per cent and 50.01 per cent, respectively). In addition, under the signed agreement, PKO Bank Polski and EBRD have provided the Company a credit facility in the amount of PLN 554.5 million for the construction of a wind power plant in Kukinia and refinancing of the investment in the farm in Tychowo, with an equal share in providing credit facilities.

“By getting involved in the project, PKO Bank Polski has conducted one of the most complex structured transactions in our market. This is one of few examples of infrastructure investment financing with a syndicated facility, as part of the project finance, and with equity participation of the fund at the same time. PKO Bank Polski has supported this project not only because of its exceptional capital strength as a financing bank, but also through the unique skills and experience of the team. In addition, as the only bank in Poland, we have access to a unique capital fund – Marguerite, so we can also finance transactions at a scale unattainable for others”, says Jakub Papierski, Vice-President of the Management Board of PKO Bank Polski in charge of ​​investment banking.

“The EBRD is strongly committed to decarbonisation of the Polish economy”, said EBRD Director for Poland Lucyna Stanczak. “Renewable energy projects like these wind farms can gradually help the country reach the EU targets, as well as help the environment. The Kukinia wind farm financing brings the total EBRD investment in sustainable energy to €10 billion. The EBRD will continue to look at ways to support green energy – in Poland and other countries - with longer-term financing not easily available in the marketplace”.

The Bank welcomed the project owing to very good results of windiness tests, confirmed by the results obtained by the already operating in this area wind farm of this investor and experience in the implementation and operation of farms in Poland and worldwide. In addition, the investor has already concluded connection agreements with the grid operator.

Nicolás Merigó, CEO of Marguerite Adviser, said: “This transaction represents a unique opportunity to invest in a combination of utility scale operating and ready-to-build wind farms in Poland with an experienced independent developer.”

Gerhard Matzinger, CEO of RP Global Group, said: ‘With equity partner Marguerite, financing banks EBRD and PKO BP and turbine supplier Enercon we were able to attract the top players in the industry. This made it possible to close this complex and challenging transaction, the only one of its kind in 2012 in Poland, in a difficult and uncertain legal environment. In this respect the partners are relying fully on Poland’s reputation as a stable and investor-friendly country. Poland will likely remain a focus of our investment activities due to its reliable investment conditions’.

The Tychowo wind power group is located in the Sławno municipality, near Słupsk. The project includes 20 wind farms of Nordex N90/2500 LS WTG type with a capacity of 2.5 MW each and a total nominal capacity of 50 MW. The power plant has been producing electricity since December 2010.

The Kukinia wind power plant group with a total nominal capacity of 54 MW will be located within the Ustronie Morskie municipality. The estimated construction time of the farm is about 15 months (from September 2012 to December 2013). It will be divided into two stages, i.e. Stage 1 will include the construction of 14 turbines and Stage 2 will include the construction of 9 turbines.

The total capacity of the two power plants will be 104 MW. There are currently 1,968,305 MW (as of 31.03.2012) of operating, renewable wind energy installed in the entire Polish market. By financing the farm project PKO Bank Polski acquired more than 5 per cent in that market share and strengthened its leading position as a bank financing renewable energy.

The Margeurite Fund (2020 European Fund for Energy, Climate Change and Infrastructure) is in the history of the European Union the first example of a pan-European model of funding infrastructure projects based on the consensus of leading financial institutions and governments of countries under the aegis of the most important leaders of the community institutions – the European Commission and the European Investment Bank. What is more, these two institutions have decided to support the undertaking in terms of capital, stressing therefore its important role in the further development of the community and the implementation of the Marguerite Fund's investment objectives. The Fund's strategy provides for the financing of energy and transport sector investments in all 27 European Union countries.

PKO Bank Polski is one of the main shareholders of the Fund, which has the status of the so-called “Core Sponsor”, with the involvement of EUR 100 million. Other Fund’s strategic shareholders are the leading national financial institutions: Caisse des Dépots et Consignations (CDC) – (France), Cassa Depositi e Prestiti (CDP) – (Italy), Kreditanstalt für Wiederaufbau (KfW) – (Germany), Instituto de Credito Oficial ( ICO) – (Spain) and the European Investment Bank.

In addition, PKO Bank Polski will be a co-crediting bank for each Fund's investment implemented in Poland. Apart from the wind power plants, the Fund is currently working on waste incineration plant projects in Poznań and the airport in one of the larger Polish cities.

***

PKO Bank Polski is a Polish banking sector leader. Its consolidated net profit for the first half of 2012 totalled PLN1.95 billion. The bank has been regularly recognised in prestigious industry rankings.  It received the Bank of the Year in Poland honour award of The Banker international monthly.  Its financial results and comprehensive modernisation effort met with recognition. The Polish Accountancy and Tax Institute honoured the PKO Bank Polski Annual Report for the Year 2010 with the Grand Prize in The Best Annual Report competition, in the Banks and Financial Institutions category. The Bank was recognised, among other things, for its balance sheet total growth rate and its overall market activity. Additionally, Gazeta Bankowa named the bank the Highest Effectiveness entity in its category. PKO Bank Polski once again ranked the highest in ARC Market and Opinion’s survey of bank call-centre help-lines. PKO Bank Polski is the country’s strongest image bank in Poland. It is also the highest value brand in the Polish banking market. Experts of The Banker magazine assessed its value at USD1.5 billion while the Polish Brands 2011 ranking of the Rzeczpospolita daily valued it at PLN3.75 billion. According to Newsweek’s 100 Most Valuable Firms ranking, it is also the highest value domestic bank. Philanthropic activities of PKO Bank Polski met with recognition of the Academy for the Development of Philanthropy in Poland, which granted the Bank and its Inteligo Financial Services the Benefactor of the Year 2010 statuette, and of the Polish Donors Forum, which granted the Bank the Special Award for its longstanding and consistent support of public interest causes. The Bank is counted among the best banking sector employers; so indicate the key league tables complied based on opinion pools held among students. Its high position in this respect has been further validated through surveys ran by the Universum Global international researchers and the AIESEC association among students of the country’s best universities.