PFR Ventures launches new climate-friendly programme

photo: Karsten Wurth, Unsplash
photo: Karsten Wurth, Unsplash
PFR Ventures has launched a new fund to invest up to PLN 80 mln each in VC’s that invest in climate tech and operate in Poland

The following news items appeared in PT Weekly, Poland Today’s weekly business newsletter, on Friday 23 July – free to register here

PFR Ventures launches new climate-friendly programme

Government-backed PFR Ventures has launched a new PFR GreenHub programme that will finance projects related to combating climate change, according to onet(dot)pl. PLN 200 million is available for venture capital funds, with a single fund able to receive a maximum of PLN 80 million. The money is intended to help fill the financial gap faced by entrepreneurs who need another investment round, PFR says, and they are looking for VC funds willing to finance companies whose solutions have a direct impact on climate change. “We are a company that manages funds of funds, i.e. vehicles that invest in venture capital and private equity funds,” said Małgorzata Walczak, investment director at PFR Ventures responsible for PFR GreenHub, in an interview with Business Insider Polska. “GreenHub is the seventh programme under PFR Ventures. Five of them are dedicated to venture capital funds and one to private equity funds. GreenHub is a specialist fund,” she continued. “We were inspired by our investor PFR SA, which has been trying hard to address issues related to the energy transformation for two years. This year a strategy was adopted at the PFR Group level, which refers, among others, to the Green Deal of the European Commission. It aims to address energy transformation at all levels – large investments, local governments, education – and PFR Ventures will take care of the fourth leg, i.e. investments in green innovation.”

Funds that want to access money from PFR GreenHub must have an appropriate investment strategy. “This money is for entrepreneurs. It’s not billions of dollars, but those who need a few or a dozen or so million zlotys. For us, the key factor is that the funds will have a dominant strategy or portfolio in climate tech. We do not want to give money to generalist funds and we communicate this from the very beginning. We say to such funds: it’s a waste of your time, you will not get this money” stated Mrs Walczak.

The money is intended for investment by companies that already operate in Poland and need another investment round. “These must be VC projects, i.e. those that can be sold within five years to a strategic investor or other fund – and earn on it. These are the aspects that we pay attention to. We are not interested in PR or greenwashing. We focus on climate tech and ESG – not CSR campaigns.”

According to their website, PFR Ventures is the biggest ‘fund of funds’ manager in the CEE region, which, together with private investors, business angels, and corporations, invests in venture capital funds and private equity funds. Their goal is to use this capital to support innovative Polish enterprises at various stages of their development. At present PFR Ventures has a portfolio of more than 50 funds, which have made over 250 investments.


81% of companies in Poland have trouble finding qualified employees

Despite Poland having one million unemployed, Polish companies have trouble finding the right people for the job, according to the recent report “Niedobór Talentów” (Skill Shortage) by international recruitment company ManpowerGroup. 81% of companies in Poland can’t find skilled workers. The survey was based on 550 large, medium and small Polish firms across seven sectors. The rate is much higher than in previous years: 70% in 2019 and 51% in 2018.

“We are currently witnessing a progressive technological revolution, significantly accelerated by the COVID-19 pandemic,” said Iwona Janiak, general manager of ManpowerGroup in Poland. “The business reality of companies has changed noticeably over the past two years. It’s no wonder that in many organizations there’s a need for new skills that employees may not have yet acquired. The result is a noticeable shortage of qualified candidates on the labour market, which was considerable even before the health crisis. Many organizations suspended their recruitment processes during the pandemic, which were restored at the beginning of this year, together with the easing of restrictions. This applies to almost all sectors that want to catch up due to the lockdown, for which they need new human resources.”

According to Business Insider, companies are forced to compete for skilled workers, resulting in a rise in wages – the highest increase in 13 years. Nominally, the average salary increased by over PLN 500 y-y, from April to June, the highest ever rise in Poland. Statistics Poland (GUS) reports that in June wages rose by 9.8% y-y while employment rose 2.8%. The hardest to find are employees in logistics, industrial production, office and customer service staff. Similar trends can be seen in other countries. Poland found itself in the top tier below Germany (82%), Belgium, Switzerland, Turkey (all 83%), Italy (85%), Romania (86%) and France (88%). The worldwide average is 69%.


High inflation is perceived as “bad” by investors potentially leading to stagflation

Investors have begun to factor in the possibility of ‘stagflation’ due to increasingly high inflation rates, according to an article in Business Insider. Relatively high inflation is perceived as healthy for an economy, however, if it gets too high it may lead to so-called ‘recession-inflation’. This worries investors in Poland who say that high inflation may contribute to slowing the economy, according to Mikołaj Raczyński, director of the fund management department at Noble Funds TFI, as quoted by Polish press agency PAP. This is mainly due to the threat of future waves of COVID-19 that may cause trouble in supply chains, says Raczyński. This, he claims, is what mainly concerns investors. Demand created by households and businesses was not influenced so badly by the previous waves, however, the market may be concerned whether the economy can handle more supply issues caused by the lack of resources and workers stuck in quarantine.

The threat comes from the rising infection rate in Europe and the US, with the UK in the spotlight. Much depends on the intensity and longevity of the fourth wave, he says.


Conference sector worried ahead of potential lockdown

The Meetings and Events Industry Council (Rada Przemysłu Spotkań i Wydarzeń, RPSiW) along with the ​​Council of the Polish Tourist Organization and the Council of Experts (Rada Polskiej Organizacji Turystycznej i Rada Ekspertów) has appealed to the Ministry of Development, Labour and Technology (Ministerstwo Rozwoju, Pracy i Technologii) for clearer rules for businesses related to the event industry. This comes with the need to prepare and plan accordingly for the autumn season and the possibility of a fourth lockdown.

One solution, RPSiW says, is to allow Covid passports to work for the MICE sector (Meetings, incentive, Conferences, Events). They argue that the current restrictions and limitations due to COVID-19 pandemic restrains the sector from recovering properly. The ineffective reopening of the sector, uncertainty and lack of clear plans for the future along with insufficient aid from the government means that businesses in that sector feel hopeless ahead of autumn, they allege.


Direct trains from Prague to Gdynia through Wrocław and Poznań

Two commercial train carriers from the Czech Republic plan to create new connections from Prague to Gdynia, according to money(dot)pl. The new route, R32, will go through towns including Pardubice, Usti nad Orlicą, Lichkov, Kłodzko, Wrocław, Leszno, Poznań and Bydgoszcz and will take approx. 10 hours. The providers are RegioJet and Ceskie Drahy and plan to start in December 2023, although it is possible for the lines to be opened earlier according to the Czech Ministry of Finance.


European Court sides with Poland on Gazprom ruling

Germany has lost its fight to overturn a ruling limiting Gazprom’s access to the OPAL pipeline, which links the Russian gas producer’s Nord Stream line to the country, according to Reuters. Europe’s top court upheld the ruling, siding with Poland which sees European reliance on Russian gas as a regional security threat and has diversified its own supplies by buying liquefied natural gas (LNG) from the United States and other countries. The case is part of long-running dispute over Russian supplies with Germany pitted against Poland and other east European countries.

The 470-km Opal pipeline, which links Nord Stream 1 with onshore European gas grids, runs from northern Germany to the Czech Republic and has an annual capacity of 36 billion cubic metres of natural gas. Polish gas firms launched a case against Opal after losing some transit volumes and tariff incomes resulting from the opening of Nord Stream 1 in 2011. They filed the case in 2016 when Gazprom’s plans to double gas export capacity to Germany via Nord Stream 2 gained pace, according to Reuters. Nord Stream 2, which has a section running under the Baltic Sea, would bypass pipelines running across Ukraine, which has earned valuable transit fees from the business.

Poland, which has said it does not plan to extend a gas supply deal with Gazprom when the existing one expires in 2022, and other eastern European countries have been concerned since Russia annexed Crimea in 2014 in its dispute with Ukraine. Germany appealed to the Luxembourg-based Court of Justice of the European Union (CJEU) after a lower tribunal in 2019 annulled an EU decision to let Gazprom boost supplies via OPAL.


ABSL and Polish Investment & Trade Agency sign strategic partnership

ABSL – the Association of Business Service Leaders – has signed an official strategic partnership with the Polish Investment and Trade Agency (PAIH) to promote foreign investment in Poland and create new jobs in the business services sector. The initiative will be carried out under the patronage of the Ministry of Economic Development, Labour, and Technology. The three main goals of the partnership are: to strengthen Poland’s position as a global hub for business services, to place key senior global leadership and expert roles in Poland and to foster foreign investment in Polish cities. “Business services are the largest sector in the portfolio of projects carried out by the Polish Investment and Trade Agency. I am convinced that close cooperation with ABSL will enable us to support the export of services even more effectively and to gain further investments,” said Krzysztof Drynda, CEO of PAIH. “Any activity that increases Poland’s competitiveness on the international arena is an excellent investment in the future of the Polish economy,” said Jarosław Gowin, Deputy Prime Minister, Minister of Economic Development, Labour and Technology. “That’s why I’m more than happy that ABSL and the Polish Investment and Trade Agency have just signed an agreement on a strategic partnership that my department supports.” Jacek Levernes, Honorary President, ABSL, added: “An increasing number of global roles supporting decision-making processes in the world’s largest companies are being transferred to Poland. We have to make the most effective use of all our advantages in the international arena, and this is what our partnership is all about..”

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Written by: Richard Stephens