Minister Domański on cooperation with Saudi Arabia. In the game, a Polish bank and a billion dollars
Worth $925 billion. The Saudi Public Investment Fund (PIF) is planning a major review of its strategy. He will soon announce a new five-year plan, Reuters reports. Due to lower than expected oil prices, the focus will be on more realistic projects, and changes will include, among others: futuristic The Line's smart city vision.
The rest of the article below the video:
Just before these plans were announced in Riyadh An economic mission with the Minister of Finance and Economy, Andrzej Domański, arrived. The Polish politician talked, among others, with the Minister of Trade Dr. Majid bin Abdullah Al-Qasabi, the head of the Ministry of Investment Khalid A. Al-Falih and representatives of PIF.
— Given political convergence and similarities in our approach and position, we believe that Poland and Polish companies have enormous opportunities to increase their presence and gaining a significant share in the local market in Saudi Arabia – assured Al-Falih during his inaugural speech at the Polish-Saudi business forum held on this occasion.
After the meetings, Andrzej Domański talked about the effects. Specific declarations were also made, and one of the projects is to be launched this year. Poland wants to take advantage of the “realistic” view of the Saudis and enter the local market more strongly, as Riyadh looks for opportunities to diversify.
— Now we need a permanent communication framework — with clearly assigned people responsible for specific areas, such as energy, infrastructure or IT, as well as tools such as warranties — and regular monitoring every few months, said Andrzej Domański.
Billion dollar guarantees
And a Polish delegation came to Riyadh this weekend with a proposal of real projects. “Not to boil the ocean” (Don't take on too much – note ed.) – emphasized Minister Andrzej Domański in a conversation with Saudi Minister of Trade Majid bin Abdullah Al-Qasabi. Instead of lofty unrealistic visions, relationships are meant to be based about achievable specifics.
Khalid A. Al-Falih
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Contributor / Contributor / Getty Images
The talks in Riyadh will result in increasing the Polish contribution to the local economy. Credit guarantees provided to Polish companies are intended to help with this. The pool has reach one billion dollars and go to projects implemented by Saudi Electricity Company (SEC) – a leading producer and distributor of energy in the Kingdom. Polish energy companies are already present on this market, and thanks to closer political cooperation and guarantees, they will be even closer to the largest projects.
— The whole thing is based on a self-financing mechanism that we have been using for years – where the premium covers the damage and the state budget does not bear the costs, as long as the latter do not exceed the revenues. When financing contracts, we also require that ordering parties purchase goods and services in Poland. The instrument is guarantees worth one billion dollars – so we do not put out any money here and now, commercial banks do it thanks to us – explains Janusz Władyczak, president of the Export Credit Insurance Corporation (KUKE). BGK and Pekao SA took part in the talks on this topic, and ultimately these could also include foreign banks.
The first projects using the mechanism are scheduled to start in 2026. — SEC is a large entity with a very good financial condition, so we see no problem in borrowing such funds. We want the first transaction – most likely regarding transmission networks – to be completed this year – adds the head of KUKE.
— Next in line is a gas power plant – we want to co-finance it, just like we do in the case of our power plants in Poland, supporting the energy transformation – he continues.
Will a Polish bank enter Saudi Arabia?
The position of Polish companies in the competition for Saudi contracts could be strengthened by the presence of a Polish bank that would support them in obtaining financing. And closer relations between Warsaw and Riyadh at the political level may make this idea more plausible.
— In Saudi Arabia they could branches of one or two Polish commercial banks will appear. This would make it easier for companies to operate and make them very credible here, said Minister Domański. He didn't mention specific names, but it's easy to guess who was probably responsible for such an undertaking could be supervised by the state treasury of PKO BP or Pekao SA.
The head of the Ministry of Finance argues that Polish companies may have many opportunities on the local market. — In the banking sector, we are one of the global leaders. Our companies are ready to transfer know-how, not just sell ready-made solutions – he assessed.
Poland is tempted by a huge fund
Representatives of Polish institutions also talked to representatives of the above-mentioned PIF. – It was another conversation with their representatives recently – this time we got down to specifics: what investments, what development programs does the PFR group have – said Mikołaj Raczyński, vice-president of the management board of PFR SA for investments.
What was talked about? – Raczyński talked about the development of the venture capital market, the largest Polish companies, and the fact that large infrastructure projects are being built in Poland – from the Port of Poland, through SMRs, to nuclear energy.
— However, it will be difficult to engage such a large fund in projects in Poland. If only because of the scale of the projects he would like to get involved in. PIF does not invest in projects below EUR 200 million of investment. It is a huge challenge to generate projects of this scale in our economy, but we are confident that this will be achievable over time – he concluded.
From Riyadh, Grzegorz Kowalczyk, journalist of Business Insider Polska
