BOŚ: green shade of financing

Achieving carbon neutrality is one of the most serious challenges for the Polish economy. How can banks help in this process?

The banking sector has a very important role in this area, which will be visible in several aspects. One of them is sharing experience and knowledge. BOŚ has 30 years of experience in financing green projects. As much as 36 percent of our loan portfolio is green, which is by far the most among all Polish banks. This shows that thanks to our experience and numerous successfully completed projects, we are perfectly prepared to offer hollistic financing solutions even for the most complex projects.

The second aspect is the banks' ability to cooperate with other financial institutions, including European ones. This is of great importance, since - depending on their technological advancement - various projects may require a different combination of products for their effective implementation. We are talking, for example, about grants, guarantees from the European Guarantee Fund or BGK, financing from private funds or Polish Development Fund. Moreover, as National Fund for Environmental Protection and Water Management is a strategic shareholder of BOŚ, our bank offers additional benefits.

In addition to experience and benefits resulting from the cooperation with other institutions, the banking sector will also be a catalyst for the shift towards carbon neutrality in another dimension, which has to do with the ability to generate new projects, especially in the field of green transformation. The transformation currently in progress is an unprecedented phenomenon for our clients, including local governments and corporations. They need support and professional advice, so BOŚ attaches great importance to these aspects.

For example, we have recently signed an agreement to finance the “Dobra Energia dla Olsztyna” (“Good Energy for Olsztyn”) project. The project involves construction of a remarkable and interesting incineration plant, providing electricity and heat for the city through cogeneration. For seven years this project was unsuccessuflly searching for appropriate financing on the market. It was only due to the participation of a number of institutions, including BOŚ, that we managed to close the project.

Another example is our involvement in a number of district heating investments. This sector is facing significant challenges related to the high price of CO2 emission allowances and the required technologies for the conversion to low-carbon energy sources. We are discussing with the district heating sector the possibilities of providing support and advice for the most promising projects.

What is the interest on the part of Polish businesses?

On a micro scale, we are growing year by year at a rate of 16-17 per cent, which is a very good growth rate for the banking sector, and we have no reason to complain about the lack of interest in our offer. On a macro scale, we are on the threshold of a green revolution, which will trigger a wave of environmentally friendly projects. It is worth to note that the green transformation has an additional advantage, since - along with digitisation - it offers a way out of the current crisis. The transformation will affect all entities - both local governments and corporations. What is important, it will not only pose a challenge to the energy sector, but will also be a major test for industry, which will have to become greener, replacing carbon-intensive energy sources and and implementing energy conservation solutions. The same applies to the whole economy, including the service, transport and construction sectors. What is important is that business is showing a keen interest in green financial products. 

The developers we talk to are already asking about green loans that will pay off when building low-carbon housing developments. We are currently working on such a product. I think that, in cooperation with NFOŚiGW, we will be able to offer within the next few months solutions that will meet such market demand.

This must clearly be an advantageous situation for BOŚ?

We have a saying in the financial world that the graveyard of finance is full of tombstones of those who were right too early. Fortunately, BOŚ is always right at the right time, never too early. We can say that after 30 years of BOŚ existence, the market is finally catching up with the model in which we have been operating for a long time. We assess each of our loans in terms of whether it is green or not. Other banks are just getting ready for this, while we have been practising it for a long time. In addition, what makes us stand out among our competitors is the fact that in each of our 13 business centres (3 more will be added soon) we employ environmental specialists, who assess transactions from the ecological point of view. What is more, we are the only bank in Poland to have a person responsible for ecology and climate on our board of directors. We also have a group of advisors specialising in green financing. The market situation is clearly favourable for us. But the real test for BOŚ will be how well we can respond to the challenges of decarbonisation in a client-friendly way.