Rejuvenating Poland’s maritime economy

Poland’s Ministry of Maritime Economy and Inland Navigation (MGMiŻŚ) is in the process of developing a Maritime Development Fund (MFR), in the hope of rejuvenating Poland’s maritime economy and infrastructure.

The MGMiŻŚ has yet to say which entities will become founders of the MFR and pay its initial capital, which will amount to 200 million zloty. Among those rumoured to become founders are the Polish Development Fund and Bank Gospodarstwa Krajowego. The fund will also obtain financing from the market, probably by issuing bonds. In all, it hopes to raise two billion zloty for investments in the maritime industry.

Polish news portal Puls Biznesu has reported that MGMiŻŚ has already prepared a bill setting out the rules for the operation of the MFR. The fund will engage capital, grant loans and issue bonds. It is expected finance 20-25 per cent of the value of an investment or shipbuilding contracts, port projects or shipping projects.

Capital investment

The development of the MFR would be good news to companies operating in Poland’s maritime sector, where capital can often be difficult to find.

“None of the banks, including the state-owned banks, are interested in financing the maritime industry,” Ewa Kruchelska, chairwoman of the board of directors of Crist, a shipbuilder, told Puls Biznesu.

The MFR will be a joint-stock company that will operate as a specialised commercial fund in the maritime sector. According to the provisions set down by Poland’s Council of Ministers, the project is aimed at filling the gap in the lack of sufficient institutional infrastructure and financial resources for the development of the maritime economy, including financing investment projects. It is hoped that the project will also assist in ensuring Poland meets its 2020 Strategy for Responsible Development.

The creation of the development fund follows MGMiŻŚ research which notes that financing by European banks in shipbuilding and maritime transport has dropped significantly since the last financial crisis in 2008, falling from 83 per cent before the crisis to 63 per cent today. However, the research also notes that there has been an increase in investment in Asian maritime markets, from 14.8 to 32.3 per cent during the same period.

A boom in Polish shipbuilding

The drop in investment notwithstanding, Poland’s shipyards are seeing an increase in business and there is huge potential in the market. Poland’s shipyards have this year almost doubled the number of ships they have been contracted to build. For the first half of 2018 Polish shipyards have contracts for 20 units in their portfolios, while in the same period of 2017 there were only 11.

Ms Kruchelska believes and hopes that with the help of the MFR, Crist will be able to carry out investments in its shipyard.

“Crist is planning a large investment worth over 80 million zloty. It involves building so-called ‘within thin-walled’ and ‘thick-walled’ sections. While we have received a subsidy of 42 per cent from the innovation fund, talks with banks on co-financing do not look promising. This investment will increase production capacity and competitiveness on the shipbuilding market, especially in the growing area of large passenger ships,” explains Ms Kruchelska.

The Industrial Development Agency (ARP) is another state-owned joint stock company operating in the shipbuilding sector, which earlier in 2018 took full control of the Gdańsk Shipyard and GSG Towers operating in the offshore energy sector, buying the remaining shares from a Ukrainian investor.

“Reconstruction of the Polish shipbuilding industry is very important within the context of the Strategy for Responsible Development implemented by the government of Prime Minister Mateusz Morawiecki. The acquisition of the Gdańsk Shipyards and GSG Towers is a deal based on reliable analyses and the good economic outlook for the shipbuilding market,” said Andrzej Kensbok, vice-president of ARP management board.

ARP supports the creation of the MFR.

“From our point of view, the possibility of financing shipowners ordering ships from Polish shipyards deserves special attention. It offers Gdańsk Shipyard and GSG Towers the prospect of orders and an opportunity to rebuild market position and speed up international expansion. We also see the possibility of cooperation with the fund as a guarantor of export contracts for ships or off-shore constructions for oil and gas or wind energy,” adds Mr Kensbok.


According to Mr Kensbok, it is not only about the shipyards, as the fund will also be useful in the implementation of planned infrastructure investments, such as the Vistula Spit, the construction of the central port in Gdańsk or the modernisation of ports, including the deepening of waterways in Szczecin or Gdańsk.

Jowita Zielinkiewicz, director of innovation and fundraising at the Port of Gdańsk Authority (PGA), sees a role for public-private partnerships.

“Cooperation with the fund can be taken into account when implementing large projects planned in public-private partnership,” she said. “Through this model, private entities in partnership with the Port of Gdansk intend to build a central external hub, which will significantly increase the potential of trans-shipment handling. The port in Gdynia also plans to build an external hub.”

“For the Gdynia Maritime Port Authority, the creation of the MFR is an excellent opportunity to obtain additional support for the construction of an external port. The project, which has a total budget of over six billion zloty, is very popular among foreign investors in the industry. Thanks to the MFR, it will also have a better chance of obtaining attractive domestic financing. In addition, domestic investors will be able to take advantage of the investment offer in one of the most dynamically developing port operations, namely container handling,” explains Piotr Nowak, vice president, director of finance and financial management at the Port of Gdynia.

According to companies operating in the field of logistics, support via the MFR may have a direct impact on the development of Polish port terminals, in particular when it comes to ​​increasing cargo handling potential, with the implementation of new cargo handling technologies, as well as the implementation of innovative operational management solutions using IT.

“Investments in specialist equipment, management systems and storage areas may require expenditures amounting to several dozen million zlotys. The fund’s involvement would be an opportunity to accelerate planned investments in ports. We are open to talks with partners who can support the implementation of our investment plans,” Karol Bowżyk, director of the OT Logistics Port Division told Puls Biznesu.

Photos: Port of Gdańsk