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New KUKE guarantees will help Polish companies finance expenses related to energy transformation and carry out investment projects aimed at achieving climate neutrality for the economy. They will also assist banks providing loans for green investments by reducing their risk and enabling a multiple increase in the scale of lending activities.

KUKE has introduced instruments that secure the repayment of financing provided by banks for the green transformation of Polish companies. These “green” guarantees will apply to a wide range of investments that contribute to mitigating climate change. The new solutions from KUKE aim to encourage banks to increase financing for the energy transformation of the Polish economy and to mobilize additional funds for this purpose from foreign sources as well.

According to the latest assumptions from the Ministry of Climate and Environment, the cost of the transformation outlined in the updated National Energy and Climate Plan by 2030 will amount to nearly PLN 800 billion. A report published this year by UN Global Compact Poland, titled “Green Finance in Poland,” points to an investment gap in the economy of up to EUR 1.9 trillion by 2050.

"Poland needs clean and affordable energy to maintain its fast economic growth and to ensure that domestic companies can continue to compete effectively in global markets. Therefore, our goal is to accelerate the energy transformation, which requires the mobilization of additional financial resources. The availability of these resources will encourage companies to invest in green technologies. The best, proven, and budget-neutral tool for this is state guarantees for the banking sector, which alleviate concerns about financing the climate transformation of their clients. KUKE, which already successfully guarantees credit repayments for exporters, is responsible for working with banks and issuing these guarantees."

Jacek Tomczak, Deputy Minister of Development and Technology

KUKE has developed the mechanism for these new instruments and the model for cooperation with banks over the past few years, offering guarantees for investment and working capital financing provided to Polish exporters for domestic projects. The maximum guarantee level is 80% of the loan value, meaning that a bank using this solution can increase its client financing capacity by five times. In 2023, the value of loans guaranteed by KUKE reached PLN 2.5 billion. Currently, all major corporate banking institutions in Poland are using KUKE guarantees.

KUKE is one of the first export credit agencies in the world to support the climate transformation of the national economy. Previously, these agencies focused on financing the operations and development of domestic exporters.

"The green investment guarantees are an innovative solution through which KUKE will contribute to modernizing the economy and strengthening the competitiveness of Polish entrepreneurs in a completely new area. In addition to its traditional activities in trade credit insurance, both domestic and export, KUKE has added groundbreaking instruments in recent years, supporting domestic exporters' investments, ensuring liquidity, integrating producers into global supply chains, and attracting foreign investments. Now, KUKE is dedicating its resources and expertise to addressing the biggest challenge facing Poland’s economy in the coming decades: the energy transformation. KUKE guarantees are available to all companies, whether they need to adapt to new regulations and want to reduce their negative environmental impact to meet the Fit for 55 requirements, or they are aiming to carry out projects, especially in the energy sector, that will shift our economy toward green solutions. Our proven model of cooperation with banks allows us to believe that we will achieve significant scale in this area quickly. This year alone, we can issue guarantees worth up to PLN 10 billion."

Janusz Władyczak, President of KUKE

KUKE offers two types of “green” instruments: guarantees for the repayment of financing for medium- and long-term investment projects, and guarantees securing the repayment of short-term obligations to suppliers and financial institutions by companies making significant contributions to mitigating climate change. Both domestic and foreign financial institutions can benefit from KUKE’s support program.

"The value of investments needed in the economy to combat climate change exceeds the financial capacity of the domestic banking sector. KUKE’s role will therefore be twofold. Credit risk-reducing guarantees act as leverage, allowing banks to increase the limit of funds available to companies by up to five times. Additionally, through longstanding cooperation with international financial institutions, including commercial and development banks, we will attract foreign capital dedicated solely to transformation efforts. Having access to their own financing for projects, such as offshore wind farms, strengthens our position and increases the local content of investments."

Adam Winogradzki, a member of KUKE’s board

KUKE’s guarantees for green investments can cover loans with very long repayment periods (over 20 years) and a minimum value of PLN 10 million. The program does not require allocation of state budget funds, as it is implemented within the limits set for KUKE.

Examples of projects eligible for KUKE’s “green” guarantees:

KUKE’s vision

KUKE's primary mission is to empower companies to engage confidently in global trade, fostering sustainable economic growth and job creation. "Our vision is to be a linchpin in enabling safe and secure trade and investments," says Katarzyna Kowalska, Deputy CEO and CRO of KUKE. "In an era of decreasing predictability in the economic environment and rapid changes in business conditions globally, our services are not just optional; they're critical."  

The challenge of multi-regional risk assessment

One of the most significant challenges KUKE faces is the risk assessment of businesses operating across various geographies. Each region comes with its unique economic landscape, legal regulations, and business cultures. "Traditionally, assessing the creditworthiness and reliability of international businesses has been a time-consuming and resource-intensive task," stresses Grzegorz Kwieciński, Head of Risk Department at KUKE.

The need for digitisation

Given new challenges ahead of Poland’s economy and the growing needs of local businesses, KUKE recognises the necessity to amplify the digitisation of its operations to ensure agility, competition edge and customer satisfaction. "In today's fast-paced business environment, relying on manual processes and fragmented data is a roadblock to growth," ads Grzegorz Kwieciński. "That's where our partnership with Wiserfunding becomes invaluable".  

As international trade continues to become more complex due to geopolitical shifts and market volatility, the partnership between KUKE and Wiserfunding offers Polish businesses a modern solution to an age-old problem. This collaboration aims not just to minimise risks but also to create new opportunities for growth and expansion. 

The Wiserfunding solution

Wiserfunding offers an advanced suite of credit risk intelligence tools, tailor-made to tackle the complex challenges of global business. "We're excited to provide our risk intelligence and insights to KUKE’s internal platform," says Gabriele Sabato, CEO and Co-Founder of Wiserfunding. "Through our joint efforts, we aim to substantially streamline and enhance the evaluation process for international businesses, marking a significant improvement in operational efficiency and accuracy in risk management" 

"Our partnership with Wiserfunding is yet another important step in digitising KUKE which brings us to top league of trade insurers after introducing in late 2023 up-to-date electronic platform for customers. Risk assessment in international markets has always been a complex task. This partnership enables us to offer an advanced, data-driven solution to Polish exporters, helping them make more informed decisions. It also can impact KUKE’s efficacy which enables us to stay competitive both locally and internationally as well as achieve satisfactory financial results.” 

Katarzyna Kowalska, Deputy CEO and CRO of KUKE

"KUKE is one of the top European ECAs and has an exceptional track record of supporting businesses in their global endeavours. We are honoured to be able to support their mission with our powerful technology and unique expertise. Thanks to our solution, KUKE will be able to increase the speed and the availability of their support to Polish exporters by analysing all their buyers in few seconds and monitoring them frequently. Full automation of the digital lending process and early-warning system is a key success factor in today’s digital economy."  

Gabriele Sabato, CEO and Co-Founder of Wiserfunding

About Wiserfunding

Founded in 2016 by Prof Edward Altman and Dr Gabriele Sabato, Wiserfunding is a London-based fintech company with a focus on leveraging advanced analytics to assess the credit risk of small and medium-sized enterprises (SMEs). Created by experienced academics and professionals in the finance sector, the company was established to address the existing gaps in the SME credit risk intelligence.

Wiserfunding strives to become the go-to platform for credit risk intelligence, bridging the gap between SMEs and financial institutions and enabling healthier, more sustainable business relationships.  

“On September 28, the amended Act on insurance guaranteed by the State Treasury, entered into force, allowing KUKE to again provide protection for investments of Polish companies in Ukraine, despite the ongoing war there. The legislator decided that although the risk is significant, for the sake of the state's interest, Polish entrepreneurs will be provided with insurance covering 100% of their investment expenditure as well as banks for the financing provided.

Poland is also a pioneer in initiating war risk insurance for the transport industry. Polish and Western shipping companies do not enter Ukrainian territory because it is impossible to insure the related risks on the commercial market and Ukrainian entities are responsible for all transport. KUKE will be the first institution to reinsure casco and cargo cover for Polish carriers issued by Polish insurers. However, the consent of the European Commission for such instrument is necessary.”

Janusz Władyczak, CEO, KUKE

The new solutions include the reconstruction programme of Ukraine, consisting of three pillars:

The first pillar is supporting the current operations of Polish companies. It is worth recalling that KUKE continues to insure the export of goods throughout the war being an exception among export credit agencies. This pillar also includes transport insurance.

The second pillar is to insure the investments of Polish companies in Ukraine against political risk (including war) and to guarantee to Polish banks the repayment of financing granted for investments, e.g. in the project finance formula or to finance acquisitions. This pillar also includes encouraging foreign investors to locate production or branches in Poland in order to conduct business in Ukraine and other markets. KUKE is able to guarantee the financing of such investments (Pillar II) and at the same time support their export (Pillar I).

The third pillar is directly related to the reconstruction and modernization of Ukraine. KUKE can find financing and guarantee its repayment to financial institutions in exchange for inclusion of Polish enterprises into projects like the reconstruction of destroyed energy or road infrastructure, construction of new public utility facilities. KUKE will become involved if at least 30 percent work and supplies of components will come from Poland. Support may therefore apply to producers from the entire spectrum of industries, as well as service, design and construction companies. 

KUKE introduces successive solutions as part of a new system of support for exporters, which enable them to obtain funds for development and also strengthen their credibility in relations with business partners. These are completely new and modified types of insurance guarantees granted with the support of the State Treasury. One of them is the payment guarantee, thanks to which exporters secure timely payment of liabilities towards their suppliers, regardless of whether the supplier is a domestic or foreign entity.

"These payment guarantees allow Polish exporters to obtaining favourable payment terms, e.g., long-term trade credit, thus reducing their costs, while the supplier is certain to receive payment for the shipped components or materials, as the guarantee provides the highest security of trade. With the KUKE guarantee, Polish companies gains an excellent tool for negotiating supplies on better financial terms with domestic as well as foreign partners. However, if the latter prefers the guarantee of a well-known local bank, KUKE can re-guarantee such transactions, securing the exporter's obligation. Experience gained by Polish companies during the pandemic, which had to seek production parts from foreign suppliers, shows the usefulness of instruments designed to maintain liquidity and certainty of supply. Due to the crisis, many sub-suppliers lost credit limits for Polish companies under their credit insurance contracts. Thanks to this solution, Polish exporters are able to recreate such limits on their own and achieve a similar effect" - explained Krzysztof Kwaterski from the Insurance and International Cooperation Department of KUKE.

Another new instrument is the liabilities repayment guarantee for financing the supply chain of export production. It secures the repayment of exporters’ obligations to institutions financing invoices issued by the exporters’ suppliers.

"It significantly improves the liquidity of our exporters by extending the deadline set for the repayment of liabilities, when a financial institution pays an invoice issued with a 14-day payment term and the exporter settles the amount, e.g., after 60 days. We assume that factoring companies will most often appear here as financing institutions, which can use KUKE guarantees to secure financing obtained for themselves from banks. And the exporters may in this way extend the repayment of their liabilities to their domestic or foreign suppliers" - pointed out Krzysztof Kwaterski.

So far, KUKE customers have eagerly used yet another type of guarantees - those relating to the repayment of short-term loans financing export contracts. However, their construction has been changed so that they can cover practically all of an exporter's current assets, and not only those used to finance a specific contract. An ideal solution for every exporter has been created: supporting the acquisition from banks of working capital loans so frequently used by companies on a daily basis, as well as enabling problem-less increase of the already existing limits.

"By creating this guarantee offer, we wanted to kill several birds with one stone. Exporters are given a tool to strengthen relationships with their suppliers and obtain better payment terms from them. In the relations with banks or factoring companies, they can significantly increase the amount of available financing. KUKE guarantees reduce the use of the bank limit granted to the exporter by 80 percent. On the other hand, the bank can increase its involvement in financing a given exporter as much as five times using KUKE guarantees or counter-guarantees, and thus improve its profitability from the relationship with the customer. On the scale of the whole economy, this means a more effective use of banks' capital and a strengthening of Polish exporters and their potential in international markets", explained Piotr Maciaszek, Director of the Insurance and International Cooperation Department at KUKE.

The system of support for exporters, including payment guarantees, is available to entrepreneurs who can prove that in at least three of the last five years, revenues from foreign sales accounted on average for at least 20% of their total revenues. New exporters will have to demonstrate this share of exports in their sales in the first three years. Of course, it is also possible to obtain a guarantee to secure financing and supplies for a specific export contract.

KUKE assesses the credibility of the company and grants it a limit up to which all three types of guarantees can be issued. The limit is set for a period of one year, after which the fulfilment of the criteria will be verified. All three types of guarantees cover up to 80 per cent of the exporter's liabilities, and the repayment period for liabilities secured by these guarantees may not exceed 719 days.

Importantly, the procedures for obtaining guarantees have been simplified and all documentation is limited to a general or individual contract signed with the exporter.

Polish exporters now have new solutions at their disposal, thanks to which they will be able to expand even more effectively in foreign markets. KUKE offers a comprehensive system of support. Some of the instruments are addressed directly to companies, but most will be available through banks servicing and financing them. The Polish Bank Association has joined the promotion of the new package of solutions. An agreement on cooperation in this respect was signed today by presidents of both institutions: Janusz Władyczak from KUKE and Krzysztof Pietraszkiewicz from the PBA.

"cing exports and the expansion of Polish companies in foreign markets has always been one of the priorities of Polish banks, which have thus contributed to the faster development of the Polish economy over the years. It should be stressed that the vast majority of exporters implement their plans in cooperation with banks. Export financing involves specialist knowledge combining many issues. The current dynamics of economic change reinforces the need to broaden this knowledge. I hope that more and more Polish companies will become a permanent important link in international cooperation. The Polish Bank Association has for many years supported initiatives to develop domestic exports, among others through its membership in the National Committee of the International Chamber of Commerce (ICC Poland). The PBA is one of the founding members of this organisation. The global downturn caused by the pandemic has resulted in a significant increase in risk, which has made financing institutions more cautious in assessing their clients. Solutions proposed by KUKE, which increase banks' capacity to support companies, are a remedy for this state of affairs and at the same time an opportunity to return to dynamic growth after the slowdown. Maintaining high export growth dynamics should be an important element of the economic development strategy in the coming years" - said Krzysztof Pietraszkiewicz, president of the PBA.

KUKE, as an institution whose mission is to act for the benefit of Polish exporters, has for years been improving its offer of solutions supporting exports. To this end, it cooperates closely with banks providing ongoing services and financing of its clients' operations.

"Observing the profound changes that have recently taken place in international trade and investments, also as a result of the pandemic, and considering the situation in the domestic banking sector, we have completely changed our approach to the design of instruments for exporters. The new support system now being introduced encourages banks to finance more extensively not only commercial contracts but also investment projects and acquisitions undertaken by their customers. We are offering instruments that only a few countries in Europe make available to their exporters. We are convinced that using them will give Polish entrepreneurs a clear advantage in global markets. The role of KUKE, which offers instruments with State Treasury guarantees, is to limit the risk of exporter activity and the banks supporting them, and thus to strengthen the competitiveness of Polish exports" - said Janusz Władyczak, president of KUKE.

The new KUKE instruments reduce banks' credit risk connected with financing exporters' ventures. As a result, banks focused on rapid growth will be able to lend more working capital, investment capital and guarantee funds to their clients at the same risk level, while more cautious institutions will be able to reduce their risks by ceding them to KUKE. Entrepreneurs, in turn, will receive a tool allowing them to develop their trade abroad and investments in Poland, and thus conduct safe expansion.

The cooperation between KUKE and the PBA, covered by the agreement signed today, is primarily aimed at promoting the new export support system through various activities for the benefit of banking sector entities, in particular through informing about new financial solutions introduced by KUKE. Additionally, the parties will intensify cooperation in other fields, collaborating, among others, in educational campaigns concerning trade finance.

As part of the export support system, KUKE has already thoroughly modified its offer of contract bonds granted with the support of the State Treasury. The related procedures and documentary requirements have been simplified, the scope of goods and services covered, and the possibilities of their use have been significantly expanded. Using KUKE guarantees strengthens exporters’ financial capacity, positively affecting their relations with financing banks and enabling them to significantly increase the scale of their operations.

In the near future, KUKE will introduce further solutions, e.g., guarantees for financing investment projects in Poland for exporters, which may include both Polish companies and foreign investors developing production in our country; working capital loan repayment guarantees and insurance of loans for the acquisition of enterprises abroad. In terms of creating documentation for clients, KUKE cooperates with CMS Law Firm.

Polish exporters still have until the end of June – unless the European Commission decides to extend this period – to use the State Treasury backed insurance of trade receivables when selling to markets in the European Union and selected OECD countries.

The KUKE GAP EX and KUKE GAP EX+ instruments were introduced in May of last year, pursuant to the European Commission’s decision. The decision permitted the temporary utilisation of state guarantees when insuring exports during the pandemic due to the difficulties in obtaining cover from commercial insurers. Last year, several hundred Polish entrepreneurs took advantage of this solution at KUKE, and the value of insured turnover can be estimated at around PLN 1.5 billion.

This solution sparked enormous interest at the outbreak of the pandemic when there was great uncertainty on the market as to how the economic situation will pan out and as to the financial situation of foreign customers. A similar effect occurred during the autumn wave of the coronavirus infections, when severe restrictions were once again imposed on businesses in countries constituting our most important outlets. Polish exporters are looking for instruments that will allow them to safely continue sales with the utilisation of trade credit. Many of them came to realise during the pandemic that the option of offering a customer a longer payment term gives them a significant advantage. Polish firms successfully snapped up contracts of their foreign competitors because they were still capable of executing orders on time despite the lockdown, they guaranteed the required quality, and were at liberty to provide trade credit to their counterparty. Thanks to this, our export is enjoying great success, Elżbieta Kacprzykowska, Director of the Sales Department at KUKE, points out.

The largest export transactions utilising GAP EX insurance went to Germany (16% share in terms of the amount), France (14%), and Great Britain (9%). Four countries in our region are also on the ‘Top Ten’ list: Slovakia, Romania, Czech Republic, and Lithuania.

Producers of plastics (13%), food and food products were among those who benefited from GAP EX aid most often. The following industries also had an over 5 percent share in the portfolio: wood (9.4%), steel (8.6%), furniture (8.1%), and transport (5.7%).

KUKE GAP EX is tailored for companies that have a receivables insurance agreement and want to increase export sales, whereas KUKE GAP EX+ is for those firms who have been refused a limit by their insurer or have closed it to foreign customers. The insurance guarantees the broadest scope of protection, also covering trade, political, force majeure, inclusive of pandemic risk, as well as defaults in payments by public entities. So far over 2,000 counterparties from 33 countries who unfailingly meet their payment terms have been included in its cover – with only 10 cases of delay noted to date.

The pandemic, causing a serious economic crisis, has significantly restricted trade between countries, thereby impeding the continuation of foreign expansion for Polish exporters. Additional risks have appeared, like the emergence of coronavirus-related restrictions in the counterparty’s country that may, in turn, lead to defaults on payments for received goods. This is why KUKE is offering a new solution that will allow sales to 160 countries, including numerous markets that remain uninsured by other insurance societies and corporations, to be effectively secured. Among the countries that we cover under our insurance are: Russia, Belarus, China, Saudi Arabia, Mexico, Algeria, Nigeria, Vietnam, and many other Asian, African, and Central and South American states.

The greatest advantage of the new instrument is its geographical scope, broad spectrum of insurance that also covers political and force majeure risks, including the pandemic, and free risk assessment and monitoring, inclusive of debt collection. This is further reinforced by a transparent price formula and numerous, previously unavailable functionalities – and everything can be done online.

This is a solution that is ideally suited to these exceptionally uncertain times. The geographical coverage and the option of subsidiaries of Polish business entities registered abroad insuring sales are unparalleled on the market. As of today, support can be extended not just to those who have captured foreign markets with their products in recent years, taken over the competition, or built their companies from scratch. Naturally, as in the case of State Treasury-backed insurance, this instrument has the broadest coverage on the market, encompassing trade, political, force majeure, and default payment risks. It is also exempt from the requirement of the domestic origin of sold goods that has been applied up until now, Janusz Władyczak, CEO of KUKE, explains.

Risk assessment and debt recovery operations play a considerable role in sales to third countries. Many entrepreneurs are grappling with problems relating to the recovery of receivables within the country itself, without mentioning remote ‘exotic’ markets. KUKE, however, first and foremost provides free risk assessment followed by effective monitoring and, consequently, free and effective debt collection thanks to its extensive and lengthy experience and collaboration with international companies dealing with such matters. Furthermore, the exporter pays only for the sales that have actually been completed and the size of the granted limit has no bearing. The premium is charged monthly, based on the value of the reported turnover, and only a minimum premium of a mere PLN 30 is charged (up to the granted limit of PLN 500,000) in the absence of sales, or PLN 120 (over PLN 500,000). The exporter’s deductible has also been set at a low level of 5 percent.

Fully aware of just how demanding the conditions on the market are, we have endeavoured to make this instrument as flexible as possible so that every company – irrespective of the market sector, size or country of the importer – can select the most optimal insurance parameters. Thus, we have also provided additional solutions, including the option of insuring the production risk, in other words, the reimbursement of the costs of order execution if a contract was terminated by the ordering party, or the option of purchasing an additional credit limit. What’s more, there is also a possibility of insuring a single counterparty, which most insurance firms are often reluctant to provide. It is also worth bearing in mind that the insurance cover obtained translates into greater creditworthiness for banks for instance, which translates into better funding terms of own export operations as well as the possibility of obtaining financing for invoices in the form of non-recourse factoring. The Policy Beyond Borders is KUKE’s response not only to the present market turmoil related to the pandemic but also to the elevated uncertainty in international trade over the past few years. Exporters selling in riskier markets who have benefited from KUKE’s Policy for the East in the past are now getting new insurance cover complemented by attractive solutions, Janusz Władyczak emphasises.

And, very importantly, the whole process of policy agreement conclusion takes place online, using an electronic signature, which can then also be managed online via the Customer Portal, giving fingertip access to all your documentation and elect