PFR’s support of high-tech sector

Bartosz Marczuk

PFR Group – federation of Polish development institutions

Based on the Act of 4 July 2019 on the Development Institutions System (the SIR Act), PFR is a member of the broader PFR Group which comprises all the major Polish development institutions, i.e., the Polish Development Fund (PFR), Bank Gospodarstwa Krajowego (BGK), the Industrial Development Agency (ARP), the Export Credit Insurance Corporation (KUKE), the Polish Agency for Enterprise Development (PARP), the Polish Agency of Trade and Investment (PAIH) as well as their subsidiaries. PFR Group is a federation of Polish development institutions. As the CEO of PFR serves as the Chairman of the Council of the PFR Group, PFR plays a leading role and coordinates activities of other members.

PFR Group

Act of 4 July 2019 on the Development Institutions System

PFR Group – federation of Polish development institutions

Investments Banking

Industry development and restructuring

▪ Investments in public assets

▪ Investments in non-public assets

▪ Fund-of-funds investments

▪ Housing investments

▪ Financing the development and liquidity needs of companies and local gov. units

▪ Guarantees and sureties

▪ Public finance/ EU funds transfer

▪ Development of integrated and sustainable transport system

▪ Special Economic Zones & Polish Investment Zone

▪ Specialized financing (debt, equity)

▪ Development restructuring and corporate governance

▪ Innovation development

▪ Credit insurance

▪ Guarantees

▪ Investment insurance

▪ Factoring

▪ Export

▪ Foreign investments

▪ Promotion of Poland and Polish economy

▪ Partnership

▪ Innovation development

▪ Start-up market

▪ Internationalization

▪ Training and skills improvement

▪ Infrastructure development

PFR main roles

The Polish Development Fund (PFR) is a leading promotional financial institution of Poland operating on a commercial basis under the mandate of the Polish State. Established in 2016, the Company conducts business activity and coordinates and implements development programs, including those commissioned by the government, with the view to achieve a market rate of return on the invested capital in the long term.

PFR’s key activities:

Development programs ordered by Government

Development investments in local economy

Main programs

COVID Financial aid program (Tarcza Finansowa)

Private Pension Plans (Pracownicze Plany

Kapitałowe(PPK))

Central Pension Information( Centralna

Informacja Emerytalna (CIE))

>3 bn USD invested in projects and companies in energy, manufacturing, infrastructure, biotechnology and finance sectors

PFR invests in innovation

Equity investments in innovative companies, e.g.:

• PESA Bydgoszcz

• National Cloud

• WB Group

Investments in the innovation ecosystem:

• Investments in start-ups by PFR Ventures

• Development of innovations in Poland through programs for innovators and development of the startup.pfr.pl platform

PFR Green Hub – investment in building the RES sector, e.g.:

• Wind and solar farms

• ITPO

• Investment in RES start-ups

Tech Hub – supporting local companies and joint ventures in the high-tech sector through investments.

PFR equity investments in innovations, among others:

WB Group (WB Electronics)

one of the largest polish defense companies, offering high-tech solutions for the military and civilian markets. Its solutions set new standards.

PESA Bydgoszcz S.A.

the largest polish manufacturer of innovative rail vehicles. PFR has restructured the company, which has got back on track to growth

National Cloud Operator (OChK)

a company set up on the initiative of PKO BP and PFR, helps polish companies implement and take advantage of the potential offered by advanced cloud computing technologies in business.

Investments in the innovation ecosystem

approx. USD 1 billion under the management of PFR Ventures*

financed operations of approx. 400 companies

70+ funds in the portfolio

• we have trained more than 10,000 entrepreneurs

• we have helped establish 90 tech companies

PFR Green Hub – investment in building the RES sector

USD 220 million of investments within the PFR Green Hub, including: more than

approx. USD 160 million in direct and local government investments (loans, bonds, equity entries)

EXAMPLES

Lewandpol

construction of one of the largest solarwind farms in Poland with a capacity of over 200 MW, this farm will be capable of supplying energy to approx. 100,000 households

and approx. USD 60 million in a fund of funds (PFR Ventures)

R.Power

one of the largest Polish companies in the solar energy sector, the bonds issued will support business development and the construction of new photovoltaic farms in Poland

Good Energy for Olsztyn

financing the construction of a thermal waste processing plant (ITPO), ITPO Olsztyn will be capable of processing at least 100,000 tonnes of waste per year, which – in the long term – will stabilise the waste management fee and the price of heat for the residents of Olsztyn

Tech Hub – new PFR initiative

Tech Hub supports local companies and joint ventures in the high-tech sector through investments.

We invest in high-tech companies that successfully commercialize their products.

We cooperate with institutions and entities supporting Polish companies, building a comprehensive support program.

Key high-tech industries selected for investments in Tech Hub

Electronics and robotics industries

5G connectivity and the Internet of Things

Artificial intelligence and digital technologies

Advanced chemistry and materials

engineering

Drone industry (U-space)

Space industry

Investment criteria for companies in Tech Hub

Minimum investment amount – USD 12 million

(possible reduction to USD 7,5 million).

Maximum investment amount – USD 120 million.

Possibility of equity or debt financing.

Acquisition of minority stake

(with equity investment).

Investment type – development investments.

Expected financial indicators:

EBITDA > USD 5 million.

Location: main production or service resources located in Poland / activities with strong links to the Polish economy.

Polish electronics manufacturing

Reasons to invest in Poland

1 UNIQUE POLAND ADVANTAGES

• Poland’s Economy is constantly growing since 1992

• Unique geographical position gives access to EU and Eastern Europe markets

• Open globalized economy (export share is 61,7% of GDP)

STRONG OEM AND EMS SECTORS

2

• 190+ manufacturers of electronics in Poland*

• Electronics Manufacturing market value is over 15 bn USD*

• Strong growth of the sector with 8,5% CAGR (2018-2021)*

HUMAN POTENTIAL

3

• 45 universities educating in the field of electronics

• >6300 graduates in electronics and related fields annually

• Many global companies open their R&D centers in Poland

4 SUPPLY STABILITY

• Every year more European companies prefer local suppliers due to global supply chain disruptions

• Polish advanced logistic infrastructure lets companies make prompt deliveries all over Europe