WB Electronics appeals for the rating of Polish defense industry companies

Given the scale of upcoming orders, the Polish arms industry may not have the financial capacity to meet the requirement to provide guarantees for advance payments granted by the Armament Agency – said Marcin Kubica, managing director of WB Electronics, during the Polska Power Biznesu conference. He called for an objective rating system for defense suppliers instead of guarantees.

“As part of the contracts carried out by the Polish Armed Forces, (…) there is a financial tool in the form of guarantees for advance payments (…), which always expects from suppliers guarantees for advance payments in the form of financial products: bank guarantees or insurance guarantees, which are charged to the balance and are within the credit limit of enterprises,” Kubica said.

“I am submitting a motion to replace this tool, which is actually a dead tool and the only entities that make money from this tool are banks, to introduce another tool, namely a rating that is known to the world and allows for objective verification of the financial standing of suppliers,” he added.

He noted that such a rating could be used by the buyer, i.e. the arms agency, for all suppliers operating in Polish defense trade.

“This objectified criterion, obviously within the framework of the obligations of the public finance discipline, which are legally binding on the buyer, i.e. in this case a defense agency, within a given rating would give the right to grant a given entrepreneur certain limits on advances, without using these debt tools and guarantees,” he added.

In his opinion, in many cases this would simplify procedures, make deliveries easier and faster.

“The Polish industry may simply not have the financial capacity on the scale of these upcoming orders. I even put forward a thesis that perhaps Polish banks also do not have the financial capacity to cover upcoming purchases with these guarantees, as the only tool currently used. Therefore, I encourage this type of thinking as soon as possible and introduce a rating for Polish defense industry enterprises, objectively verified, enabling the granting of advance payments without these guarantees,” he concluded.

At the same time, he emphasized the importance of the advance payments themselves from the point of view of the stability of the implementation of long-term contracts. He noted that EU debt instruments also allow for advance payments.

On Wednesday, the government adopted a resolution authorizing the Minister of National Defense to submit, on behalf of the government, an application to the European Commission for financing from the EU Security Action for Europe (SAFE) instrument.

At the conference after the government meeting, Deputy Prime Minister and head of the Ministry of National Defense, Władysław Kosiniak-Kamysz, announced that by the end of the week Poland will submit an application for SAFE financing for 140 projects, including drone and anti-drone systems and for tasks under the East Shield project.

Poland can benefit from a EUR 43.7 billion preferential loan under SAFE for arms purchases.

WB Group is a Polish manufacturer offering communication technologies, command and advanced solutions for the armed forces in the areas of observation and reconnaissance systems, command, communication and management systems on the battlefield, fire control systems, strike systems, IT and cybersecurity systems, as well as equipment and modernization of military equipment. (PAP Business)

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