Debt financing in Poland –New Developments

The Polish Parliament has recently adopted a new law implementing certain changes to the Polish financial system (“the Act”).[1] The aim is to strengthen supervision over capital markets and improve protection of investors, but it will significantly impact the timing and cost of raising capital through debt securities offered outside the public market.

The new law amends the Banking Law to implement the provisions of the Bank Recovery and Resolution Directive.[2] Currently, this is a very controversial issue, given the recent resignation of the Chair of the Polish Financial Supervision Authority and the fact that the new law allows the takeover of a bank with equity below certain thresholds or with a risk of such equity falling below certain thresholds. However, this post, in fact, deals with other issues raised by the new law.

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High Court in Prague sheds some light over the definition of a significant part of an enterprise 

Like any other major change of legislation, the recodification of Czech private law in 2014 has raised a long list of interpretation issues. At the end of August 2018, the High Court in Prague outlined (since the decision has not yet been confirmed by the Supreme Court) an interpretation with respect to one of the items on the list. It clarified the meaning of the term “a part of an enterprise that would imply a significant change of the existing structure of the enterprise or a significant change in the scope of business of the company”Continue Reading

How Poles Are Celebrating 100 Years of Independence

In Poland, every 11 November is National Independence Day, commemorating the day Poland regained its independence in 1918, following what historians refer to as the partitions, where Russia, Austria and Prussia annexed parts of Poland so that it disappeared from the map of Europe for 123 years.

To celebrate the day, Poles participate in a variety of events, such as military parades, national runs (wearing the official state colours) and, for gym lovers, 100-push-up challenges. They also indulge in baked goose with apples. Some get carried away and choose to celebrate in more radical ways – which is not always appreciated by law enforcement (let us not deliberate on that).

This year, 11 November is a Sunday – is it bad luck for Polish employees, who enjoy long weekends? Not at all. The Polish parliament has decided that the 100th anniversary is so seminal, 12 November will be a day off.

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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

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