Greenberg Traurig Partner and Head of Project and Structured Finance Piotr Nerwinski talks about banking and finance in Poland in 2025.
CEELM: What is in the pipeline in terms of legislation that you believe will have the most impact on the banking/finance sector in Poland?
Nerwinski: First, there is a draft amendment to the Act of May 20, 2016, which proposes significant changes to wind farm investments by reducing the minimum distance between wind farms and residential buildings that could unlock a number of new wind farm projects.
Second, the above draft amendment also aims to enhance the support system for biomethane installations over 1 megawatt.
Finally, there is an update in funding for energy storage. The National Fund for Environmental Protection and Water Management is preparing a substantial funding program for energy storage facilities, with a budget exceeding PLN 4 billion.
CEELM: Of the above, which ones are you/your clients most excited about and why?
Nerwinski: Among the legislative initiatives mentioned, the Battery Energy Storage System (BESS) subsidy program is generating the most excitement for us and our clients. This program is seen as a critical component in transitioning Poland’s energy sector. The subsidy program presents substantial opportunities to improve and expand business plans for BESS projects. By providing financial support, it enables developers and investors to bridge the financing gap that might currently block some projects.
CEELM: On the flip side, which ones are you/your clients dreading the most and why?
Nerwinski: One of the primary concerns for us and our clients is the pervasive bureaucracy and overregulation impacting various areas of economic activity in Poland. These regulatory hurdles can often stifle innovation, slow down project timelines, and increase operational costs. A recent joint initiative by the government and entrepreneurs, led by Rafal Brzoska, CEO of Inpost, to introduce deregulation amendments, is a promising development that we are closely monitoring. So far, 24 proposals have been presented, with more expected, aimed at simplifying the regulatory environment. However, until these changes are implemented, the existing bureaucratic challenges remain a concern.
CEELM: What trends do you expect to shape the banking sector in Poland in 2025?
Nerwinski: Banks in Poland, like their counterparts in the EU, are expected to expand their green finance offerings. This includes providing green loans, which are specifically designed to fund environmentally friendly projects such as renewable energy installations, energy efficiency improvements, and sustainable agriculture.
ESG criteria are becoming integral to banks’ lending and investment decisions. This approach aligns with broader EU policies and frameworks promoting sustainability. Consequently, we see many corporate financings in the form of sustainability-linked loans, which allow for reduced loan pricing if the borrower achieves certain ESG targets. Despite changes in policy direction in other parts of the world, such as the potential departure from ESG principles under former President Trump, the EU, and Poland are expected to maintain their commitment to sustainability. This continued focus reflects the broader European commitment to the Paris Agreement and the European Green Deal, which aim to make the EU climate-neutral by 2050.
At the same time, economic conditions – including interest rates and inflation, as well as geopolitical factors – will continue to influence the banking sector. Banks will need to navigate these uncertainties while managing risks and capitalizing on opportunities in the market. As economic and geopolitical factors evolve, regulatory frameworks may also change, requiring banks to adapt quickly. Staying compliant while remaining competitive will be a key challenge for the sector.
CEELM: What is the biggest challenge for the banking sector in Poland at the moment, in your view, and what is the likelihood you’ll see it overcome in 2025?
Nerwinski: While Poland’s economy thrives, local banks face headwinds in their lending activities. Regulatory pressures, the high cost of CHF loan portfolios, and recent government interventions have added to these pressures. “Loan holidays,” initiated to support households in times of economic distress, have historically weakened bank revenues, complicating their lending strategies. As the economy continues to recover, there may be less need for government interventions like loan holidays, allowing banks to stabilize their revenue streams.
Another challenge is high interest rates. While interest rates have stabilized at relatively high levels, they enable lenders to report record-breaking financial results in the short term. However, the downside of the high-interest rate environment is its impact on borrowing costs and loan demand. As a result, the number of new financing transactions is lower compared to times of low rates. Most analysts expect interest rate cuts on the Polish Zloty to occur only in the second half of the year, and these will not be significant reductions.
This article was originally published in Issue 12.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
