Poland closes its largest PPP

A landmark project in Poland’s waste-to-energy sector has become the country’s largest public-private partnership (PPP) and one of the few European PPPs to use money from the European Union (EU) Cohesion Fund. 

A consortium including the EU-focused Marguerite Fund and SITA Polska, a subsidiary of Suez Environnement, will build and operate a waste thermal treatment plant in Poznan, with capacity to process up to 210,000 tonnes per year. The plant is the country’s first waste management PPP. 

Bank Pekao, part of Unicredit, Bank Gospodarstwa Krajowego, and PKO Bank Polski are providing close to PLN900 million (€217 million; $282 million) of debt for the 25-year, availability-based project, law firm Allen & Overy, advisor to the lenders, said in a statement. 

“This is an innovative transaction on the Polish market perfectly employing the form of a public-private partnership with the support of EU funds,” commented Tomasz Kawcynski, a partner at the law firm. 

According to a statement from the Marguerite Fund, the city of Poznan has the ability to replace part of the private funding with a subsidy from the EU Cohesion Fund, which would help lessen the cost of the project for the city.

The plant is expected to open in 2016 and is part of Poland’s PLN4.4 billion ‘Infrastructure and Environment’ programme, which aims to reduce the amount of waste stored in landfill sites, in accordance with the EU Landfill Directive. 

The deal represents Marguerite’s second investment in Poland following its acquisition of a stake in two wind farms in the country in October last year. The firm has made seven investments overall from its debut fund, which reached a first close on €710 million in March 2010 and has a target of €1.5 billion. 

Despite its original €1.5 billion target, Infrastructure Investor understands the fund has hit pause on its fundraising activities and is focusing on investing the money it has raised so far. 

Marguerite was established under the 2020 European Fund for Energy, Climate Change and Infrastructure with the backing of six of Europe’s leading public financial institutions (Caisse des Dépôts et Consignations, Cassa Depositi e Prestiti, European Investment Bank, Instituto de Crédito Oficial, KfW and PKO Bank Polski).