Completed Infrastructural Investments

PESA Bydgoszcz SA and Polski Fundusz Rozwoju SA have concluded an agreement on investment in Rail Capital Partners z o.o., which will offer the rental of locomotives manufactured in Bydgoszcz facilities. The joint venture will provide railway carriers with access to modern locomotives without the need to incur significant capital expenditure and will provide an opportunity for further dynamic development of one of the largest manufacturers of rail vehicles in Poland.

PESA Bydgoszcz S.A. and Fundusz Inwestycji Infrastrukturalnych (Kapitałowy Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych - "FIIK”) managed by Polski Fundusz Rozwoju S.A. (PFR) concluded a shareholders' agreement which stipulates the provision of PLN 200 million to Rail Capital Partners (RCP), in the period 2016-2020. PESA and FIIK will take 51% and 49% of shares in RCP, respectively. As per the adopted business plan, RCP will own a fleet of at least a dozen or so modern GAMA series locomotives by 2020.

"The goal of Polski Fundusz Rozwoju is to support the growth of Polish enterprises by improving their competitiveness in the local and international market. Financing of new rolling stock is a great opportunity to develop an innovative Polish company and the entire carriage market. We hope that due to our commitment, PESA will be able to develop production and domestic carriers will be able to modernize their rolling stock," says Paweł Borys, President of Polski Fundusz Rozwoju.

The PFR investment carried out in cooperation with PESA Bydgoszcz is part of the Plan for Responsible Development announced by the Ministry of Development. PESA is one of two Polish manufacturers of locomotives, offering proprietary construction solutions, competitive with the leading global manufacturers.

"PESA's mission is to sell rail vehicles that meet customers' expectations, but on the unstable transport market, it is more convenient for many companies to lease vehicles - task-oriented, intentional and, above all, time-limited. The formula offered by RCP provides for such an opportunity," says Tomasz Zaboklicki, President of PESA.

Launched in cooperation of PESA and PFR, RCP will first offer the Gama Marathon electric locomotives with an additional diesel unit for both passenger and freight traffic. Potential customers of RCP include carriers from the public and private sector operating in the Polish market. In the future RCP, plans to expand its offer with diesel locomotives and multi-system electric locomotives.

"The improving condition of the railway infrastructure and the reliability requirements specific to intermodal transport increase the economic attractiveness of modern locomotives use. The average age of locomotives operating on Polish tracks is 40 years. The reason carriers postpone their decisions to renew their rolling stock is associated with the risk related to the short-term nature of transport contracts. The flexibility of the RCP offer, thanks to the adaptation to Polish conditions of a model proven in many developed markets, reduces this risk," says Marcin Piasecki, PFR Investment Director responsible for the project.

The lease formula allows carriers (mainly freight carriers) to avoid a one-off expense and reduce the risk of locomotive downtime by means of the adjustment of the lease period of rolling stock to the length of transport contracts. The RCP offer will be competitive in terms of price thanks to, among others, offering single-system locomotives (dedicated to the Polish rail network), which is a solution adjusted to national carriers and at the same optimal with regard to cost.

Technical information

Thanks to over 160 years of experience and due to opportunities of the continuously developing potential of the company - from the best modern innovative solutions used in the vehicles currently manufactures - PESA Bydgoszcz SA has constructed its own locomotive as part of the Gama platform.

In the offer of PESA locomotives - similarly to trams and diesel and electric rail units - "platform" is a key word with regard to market expectations. We think about different customers and their individual needs and we do not limit other generations of products to one or two models, but we offer entire "families" - vehicle platforms, in many configurations and with different parameters.

Depending on their needs, a carrier may choose different versions of the locomotives, including an option with all types of voltage. The basic assumption in the design of the Gama platform includes the repeatability of the modules with different types of locomotives, which makes their operation easier and harmonized.

However, the mission of PESA does not only provide satisfaction to users due to the reliability, safety and technical qualities of vehicles. It is also an unprecedented attention to the working conditions of persons driving the locomotive, which is proved by the ergonomics of the cabin (consulted by PESA with the drivers as early as the design stage) and social premises with room for meal preparation or toilet.

 

The most important advantages of GAMA platform locomotives:
- modular, uniform structure of basic elements with identical car,
- low operation costs (e.g. minimum use of metal/rubber connections, simple power transmission system),
- safety - application of 4 collision scenarios (EN 15227),
- speeds between 140 and 200 km/h (standard 160 km/h),
- full on-board diagnostics with on-line data transmission,
- optional remote control,
- dream-cabin developed together with the drivers,
- social premises with toilet.

GAMA Marathon locomotive

The first of the locomotives manufactured by PESA with a diesel access system. The concept of the locomotive meets the expectations of carriers seeking reduction of costs of reloading in places without access to electric traction. Using Gama Marathon, the carrier does not have to use shunting locomotives, saves time and does not incur additional maintenance and operating costs.

Gama Marathon has been operated by Lotos Kolej, PKP Intercity, Pol-Miedź Trans and Koltrans Orlen and has received positive feedback from carriers and drivers. Carriers eagerly used the access system, and its usefulness has been proved not only in freight transport, but also in passenger transport.

Polski Fundusz Rozwoju will invest PLN 880 million in the construction of a new 910 MWe hard coal fired power unit in Jaworzno. The project is being implemented by TAURON Polska Energia S.A. Group. The investment based on the latest, low-emission technological solutions is an important element of building Poland's energy security. On 1 June 2017 in Jaworzno, with the participation of the Prime Minister of Poland Beata Szydło, the agreement regarding the possible involvement of PFR in the project was concluded.

Under the investment, the funds managed by PFR will acquire shares in the special purpose vehicle Nowe Jaworzno Grupa TAURON Sp. z o.o., which was separated from TAURON Wytwarzanie S.A. and is currently responsible for project implementation. The investment should have a beneficial impact on the financial standing of TAURON and should improve the investment potential of the Group.

"This is the largest investment agreement concluded so far between a development institution and a State Treasury company and one of the greatest investments in the Polish energy sector. Assuming diversification, reliability of energy supply and modernization of energy infrastructure, the project in Jaworzno perfectly fits into the 'Strategy for Responsible Development'. Not only TAURON and PFR will be beneficiaries of this project. The Polish mining industry, our energy security, climate policy and over 2 million households will also benefit from it. By means of this project we also want to show that clean coal technologies are reasonable both with regard to economical and environmental aspects," said Mateusz Morawiecki, Deputy Prime Minister, Minister of Development and Finance.

"The investment in the construction of the unit in Jaworzno and the model of cooperation developed with TAURON perfectly fit in the investment strategy implemented by PFR. Power engineering is one of the key sectors of our investments. The unit in Jaworzno is an important part of it, both with regard to its scale, its role in Poland's energy security, and the modern technological solutions applied allowing for the use of hard coal which respect the natural environment," says Paweł Borys, President of  Polski Fundusz Rozwoju.

The construction of the electric power station in Jaworzno is of great importance to Poland for several reasons. Firstly, it fits the plan to strengthen our energy security, based on a raw material which we have permanent access to, that is coal. The new power unit will also ensure production in the mining sector at the level of 2.8 million tons of coal per year and, therefore, will guarantee jobs in this sector for several decades. Finally, this investment shows that thanks to the use of modern technologies, it is possible to use coal fuel in a way which meets strict standards regarding emissions.

"The agreement signed today specifies the preconditions regarding PFR's possible involvement in the investment. We need to negotiate the details of the project, but we are convinced that development of the final documentation together with such an experienced and reliable partner as TAURON Polska Energia will be easy. PFR's involvement in the project secures the necessary capital for the TAURON Group, and the potential to achieve market rates of return on investment for the fund," says Marcin Piasecki, Vice-President for Investment of PFR.

The new unit is scheduled to be launched in November 2019. It will be characterized by the highest net efficiency in its class in Poland of 45.9%. The unit will generate up to 6.5 TWh of electricity annually, which corresponds to the demand of 2.5 million households. Compared to the 200MW units currently in operation, it will meet strict standards on environmental protection, reducing emissions of carbon dioxide by almost 30% and sulphur and nitrogen oxides by over 50%. In line with climate policy, the unit will meet the emission requirements resulting from BAT.

Polski Fundusz Rozwoju SA (PFR) entered into the agreement with a subsidiary of the Mid Europa Partners fund to purchase 99.77% of shares in Polskie Koleje Linowe SA (PKL) [1]. The transaction is scheduled to be closed in the coming months upon meeting the conditions precedent, including obtaining by PFR the consent of the President of the Office of Competition and Consumer Protection.

PKL is the oldest and largest mountain railway and lift operator in Poland. They own seven ski resorts in the Tatra and Beskidy Mountains. Kasprowy Wierch and Gubałówka in Zakopane, as well as Jaworzyna Krynicka in Krynica-Zdrój are the most famous. PKL is also a company with 80 years of tradition and one of the largest employers in Podhale, employing over 200 people. PKL's priority goal is sustainable development, combining investments and expanding the tourist offer while protecting the natural environment. Currently, in addition to Mid Europa Partners, four Tatra municipalities are the Company's shareholders: Zakopane, Bukowina Tatrzańska, Poronin and Kościelisko.

"The transaction for the acquisition of Polskie Koleje Linowe is part of the investment strategy of Polski Fundusz Rozwoju's funds within the area of infrastructure. PKL is an exceptional company with many years of history and outstanding infrastructure in the unique landscape of the Polish Tatra and Beskidy Mountains. PFR is a long-term investor interested in the development of PKL's ski and tourist infrastructure, preserving the natural environment of the region in cooperation with the local community," says Paweł Borys, President of the Management Board of Polski Fundusz Rozwoju.

Polskie Koleje Linowe was privatized in 2013, when the Mid Europa Partners fund, known in Poland for its investments such as Żabka and Lux Med in the past, or now Allegro and Hortex, was its main shareholder. Matthew Strassberg, co-managing partner of Mid Europa fund commented: "The investment in PKL is another example of our strategy focusing on investments in companies operating in the consumer sector, and support of their development by, for example, extending the range and quality of services offered. We would like to thank the Management Board of PKL and our co-investors, namely the Tatra municipalities, for their commitment, which helped increase the attractiveness of both the company and the entire region. The company still has great development potential and attractive plans for the future, PFR will be a natural partner that, as a long-term investor, will lead it into further growth".

Marcin Piasecki, Vice-President of the Management Board of Polski Fundusz Rozwoju says, "The planned investment is of a long-term nature and provides for the regulation of the legal situation of key assets held by PKL, such as Kasprowy Wierch, cooperation with local municipalities, local administration units, the Tatra National Park and the management board of PKL in order to further develop in current and new locations, to the advantage of the local community and to the satisfaction of domestic and foreign tourists who more willingly visit Polish mountains".

[1] Polski Fundusz Rozwoju SA concluded an agreement with the subsidiary of Mid Europa Partners fund for the purchase of 100% of shares at Altura Sàrl, the owner of 99.77% of shares of Polskie Koleje Linowe SA.              

The Group of Polski Fundusz Rozwoju is a financial group consisting of Polski Fundusz Rozwoju S.A., PFR Towarzystwo Funduszy Inwestycyjnych S.A., and PFR Ventures sp. z o.o. and others, offering instruments for the development of enterprises, local governments and individuals, investing in sustainable social and economic development. It operates on the basis of a professional team and the best international standards. The mission of PFR, as a Polish development financial institution, is to implement programs that support the improvement of Poland's long-term investment and economic potential and to equalize opportunities and protect the natural environment. More information: www.pfr.pl.

Mid Europa is a leading financial investor in Central and South Eastern Europe. As a one of the first private equity institutions in the region, operating since 1999 with offices in Warsaw, Budapest, Istanbul and London, it manages funds worth approximately EUR 4.6 billion. Mid Europa has been fully independent since 2005 and is 100% owned by its Partners.