ICBC (Europe) Poland Branch contributes zł388.33 million PLN to a zł2.330 billion PLN to PGE Polska Grupa Energetyczna to finance its day-to-day operations, investment and capital expenditure, and for refinancing purposes

Project narrative

On March 1, 2023, a syndicate of six banks — including the Poland Branch of the Bank of China (Europe) S.A. (BOC (Europe)) and the Poland Branch of the Industrial and Commercial Bank of China (Europe) S.A. (ICBC (Europe) — signed a zł2.330 billion PLN ($536.58 million USD; €‎490 million EUR) syndicated sustainability-linked revolving credit loan agreement with PGE Polska Grupa Energetyczna S.A. — a Poland-incorporated majority state-owned public power company headquartered in Warsaw and listed on the Warsaw Stock Exchange, with the State Treasury of the Republic of Poland as the largest shareholder (60.86% at time of loan) — to finance its day-to-day operations, investment and capital expenditure, and for refinancing purposes. The loan carried a maturity period of four years and a final maturity date of February 26, 2027 and an interest rate based on WIBOR plus a margin dependent on an environmental, social, and governance (ESG) rating assigned to PGE by a specialized agency. Interest periods would not be longer than six months. The loan was unsecured. The loan contained a financial covenant to main the consolidated net debt to consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) no more than 4:1 if PGE held an investment grade credit rating (BBB- or higher assigned by S&P or Fitch and Baa3 or higher assigned by Moody’s) or no more than 3.5:1 in the case if PGE did not have an investment grade credit rating. Each of the six lenders contributed about zł388,333,333.333 PLN ($89.43 million USD) to the loan syndicate. Record ID#108986 captures BOC (Europe)'s contribution. Record ID#108989 captures ICBC (Europe)'s contribution. In addition to BOC (Europe) and ICBC (Europe), the following lenders contributed to the loan syndicate: Powszechna Kasa Oszczędności Bank Polski S.A. (PKOP), Bank Polska Kasa Opieki S.A., Alior Bank S.A., and Santander Bank Polska S.A.. The proceeds were to be used by the borrower to finance its and its group's day-to-day operations with an emphasis at reducing emissions and increase of production of electricity from renewable sources, to finance investment and capital expenditure in connection with the operations of the borrower and its subsidiaries, other than investments in new carbon assets, and the refinancing of the financial liabilities of the borrower. As of December 31, 2023, the loan had an outstanding balance of zł1.501 billion PLN. On February 6, 2024, the lending syndicate entered into an amendment agreement with the borrower for the revolving loan; as a result, the Poland Branch of China Construction Bank (Europe) S.A. joined the loan syndicate and BOC (Europe) increased its commitment amount, both acting as mandated lead arrangers for the add-on facility; as a result, the loan was up-sized by zł820 million PLN to zł3.150 billion PLN (€725.1 million EUR). The purpose and terms of the loan were otherwise unchanged. Record ID#108990 captures China Construction Bank (Europe)'s contribution. Record ID#108991 captures BOC (Europe)'s contribution. As of December 31, 2024, the loan had no outstanding balance.