Central Sea Port PPP Project in Poland – “Anchors Aweigh and Full Speed Ahead”

Large-scale public-private partnership (PPP) projects are not common in Poland. However, the amendment to the PPP law, which came into effect in September 2018, should change this.

Therefore, we welcome the fact that, recently, the Port of Gdańsk announced a tender for a PPP advisor for the Central Sea Port Project (available in Polish). Thus, the “anchors are aweigh” for this project, which is estimated to cost between €1.4 billion and €2.14 billion, consisting of a new quay to be equipped with two berths, enabling ships carrying various types of cargo to be serviced.

The contracting authority is seeking an advisor comprising a multidisciplinary team of (i) engineers, (ii) financial experts and (iii) lawyers for a multiyear contract that will run through the proposed tender for a private partner to commercial and financial close.

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RES Auctions in Poland Ready to Take Off

The RES auctions are fast approaching – the first one, for existing installations, is due to start on October 17.

The long-awaited RES auctions start tomorrow. This year, the President of the Energy Regulatory Office has divided the auctions into two rounds: 17-25 October for existing installations and 5-20 November for new installations.

The auction system is based on periodically held auctions during which renewable energy producers offer to generate a certain amount of energy for a guaranteed price over the course of 15 years. The Ministry of Energy has determined the amount of energy it intends to contract through the system. The auctions are divided into five “baskets”, with the bidding for each basket to be held on a different date:

  • The first basket is for installations burning biogas from a variety of landfills (e.g. waste and biogas from sewage treatment plants)
  • The second basket is for hydro energy, geothermal and offshore wind farm installations
  • The third basket is for installations utilizing agricultural biogas only
  • The fourth basket is for onshore wind farms and photovoltaic power plants
  • The fifth basket is for hybrid RES installations

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Will One of the CEE Countries’ Governments Take an Example From Malta or Lichtenstein in Developing Blockchain Regulation?

Digital Finances

Many countries inside the European Union are still struggling to come up with clear regulations that would provide a predictable set of rules for the blockchain technology. However, smaller nations like Liechtenstein and Malta have sorted it out. Continue Reading

Renewable Energy in Poland – More Optimism In Holiday Season

TSolar Power Energyhe long-awaited amendment to the Renewable Energy Sources Act (RES) is now in effect.

Before the holiday season, on June 29, 2018, the President signed into law the long-awaited amendment to the RES. It was published later that day (fast track), thus the provisions regarding RES installation were effective as of July 1, 2018, with the remainder taking effect, generally, on July 14, 2018.

The first trigger for introducing the amendments was the need to execute the European Commission Decision conditionally allowing the Polish auction-based model of supporting RES. While at it, certain previously flawed provisions were fixed and several new solutions were added.

Depending on the point of view, the outlooks vary. Generally, it seems that the amendment is beneficial to renewable energy producers, yet there is still a lot to be desired in the long run.

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Poland’s Mega-investment Project Doubles in Size

Motion Blurred Train

The Polish government has announced details of the high-speed rail network to be built in connection with its Central Communications Port (CCP) project. The PLN 40 billion (€9.25 billion) planned rail network is even more ambitious than the PLN 35 billion (€8.10 billion) airport project.

With a target date of 2027, the CCP involves:

  • Construction of new hub airport 40 km from Warsaw
  • Reconfiguration and extension of Poland’s rail network with CCP as its hub
  • Extension of the nearby A2 motorway along with numerous ring roads
  • Transfer of major operations from Warsaw’s existing Chopin airport to CCP
  • Development of a new city neighboring CCP

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Poland’s New Split Payment Mechanism Affects Financing and Factoring Transactions

On July 1, 2018 the so-called split payment mechanism was introduced into the Polish legal system. Split payment refers to the splitting of invoice payments in B2B relations between a supplier’s current bank account and a VAT account, which is automatically opened by banks as an account directly linked to current accounts. Funds constituting the VAT portion of an invoice payment are transferred to and from such VAT accounts. The split payment mechanism in Poland is not obligatory.  Purchasers of goods or services can decide whether they want to split their payments in two parts, with the net amount transferred to the supplier’s current account and the VAT amount credited to the VAT account. The use of the funds on VAT accounts is restricted by law.

The introduction of split payment into Polish law has significant practical implications for financing, especially factoring and all secured transactions where an assignment of rights is used. Continue Reading

Poland’s New Law on the Central Communications Port Takes Effect, But Questions Remain

Loading AeroplanesPresident Duda has signed the new law on the Central Communications Port (CCP) (see our summary of the new law here and it will take effect on 20 June 2018. However, questions remain on the scope of Poland’s mega-investment project.

Prime Minister’s Volte

A key element of the plan for CCP is that the existing Warsaw Chopin Airport (which is currently used by approximately 16 million passengers annually, with potential growth to capacity of 22-24 million) would close and all commercial traffic would move to CCP, thus creating an efficient hub for LOT Airlines. However, recently, Prime Minister Mateusz Morawiecki and the governing Law and Justice Party candidate for Warsaw Mayor Patryk Jaki both stated in interviews that Chopin Airport would not close, but its usage would decrease and serve mostly Warsaw citizens and domestic traffic. Although these statements may have been influenced by local government elections, which will be held in the fall of 2018, if they do represent the government’s position, they throw into question a key point of CCP’s economic viability and have unsettled the market. Continue Reading

The Tale of Standardization: The Use of LMA Standard Forms in CEE

Colour coded documentsIf there is a holy book for finance lawyers, at least on this side of the Atlantic Ocean, it would be the Loan Market Association (LMA) standard form.

Aimed to improve liquidity and efficiency in the syndicated loan markets in EMEA, the recommended standard forms developed by the LMA are here to stay. Although intended as a non-binding recommended form to be used as a starting point for negotiation only, boilerplates and other provisions proposed by the LMA have become widely accepted market standards.

English law governs the LMA standard documentation. In fact, it is not a single form but a selection of different forms for various types of transactions, including investment grade, real estate or leveraged transactions. While Germany, France and Spain enjoy their own LMA-based primary documents governed by their respective local laws, CEE jurisdictions are still in the basket of the developing markets for which the LMA produced its developing markets standard documentation. Standard forms for developing markets are governed by English law, based on the assumption that international lenders are likely to opt for legal documentation governed by a globally recognized legal framework instead of the law of the borrower’s jurisdiction.

So, what is the practice of using LMA standard forms like in Poland, the Czech Republic, Slovakia and Hungary? Continue Reading

Plans for Poland’s Mega-Airport Progress Rapidly

The Polish government is rapidly moving forward with plans for Poland’s new mega-airport. Proposed implementing legislation has been prepared and circulated for initial comments, an extensive concept document has been prepared, the office of the project’s plenipotentiary at the Ministry of Infrastructure has taken shape, an advisory council for the project has been appointed, and a tender is being prepared for selection of a consortium to design the project, with such selection to be concluded by the end of 2018.

This major infrastructure project – now officially called Solidarity Airport – Central Transport Hub (abbreviated as CTH) (in Polish: Port Solidarność – Centralny Port Komunikacyjny (abbreviated as CPK)) – involves:

  • Construction of a new hub airport 40 km from Warsaw
  • Reconfiguration and extension of Poland’s rail network with CTH as its hub
  • Extension of the nearby A2 motorway along with numerous ring roads
  • Closure of Warsaw’s existing Chopin airport and transfer of its airport functions to CTH
  • Development of a new city neighboring CTH

The target date for initial operation is 2027.

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