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PKO BP SAPKO BP lender enters into cooperation agreement with Polish Armaments Group (PGZ)
Poland's largest lender by assets PKO BP and the Polish Armaments Group (PGZ) have signed a strategic cooperation agreement under which the bank will offer comprehensive financial support to PGZ and its subsidiaries. The agreement provides for the possibility of launching credit lines with a total target value of several billion for the defence sector, the bank representatives announced in Kielce.
PKO BP has declared its readiness to co-finance not only commercial contracts, but also investment needs related to the construction and expansion of new production capacities in the Polish defence industry. The cooperation also includes financing supply chains, technology partners and PGZ export projects.
"The agreement we signed today is breakthrough. This is not just a framework agreement – it is the beginning of a new platform for development and investment, connecting the financial sector with the defence sector," PKO BP's CEO Szymon Midera told the International Defence Industry Exhibition in Kielce.
"We want to increase the financing limits several times over – from the current PLN 2 billion to as much as PLN 12 billion. We have capital resources of PLN 100 billion – we are ready to be the pillar of this process," he added.
The bank stated that cooperation with PGZ is in line with national security policy objectives, which envisage an increase in defence spending to over 4 percent. Forecasts indicate that spending on the modernisation and development of the armed forces in Poland may exceed PLN 1.2 trillion (EUR 281.8 bln) by 2035.
"We have already identified around 450 Polish companies that cooperate with PGZ. It is them that we want to support – so that as much of the funds invested in defence as possible stays here, in the country. So that it builds the strength of Polish companies, jobs and local economies," CEO Midera said.
PGZ's CEO Adam Leszkiewicz announced that in 2024 alone, the value of orders at PGZ reached nearly PLN 20 billion (EUR 4.7 bln), and flexible, long-term financial solutions are needed to fulfil them.
The PKO BP report shows that the cost of not investing in the domestic defence industry is lost opportunities for higher GDP growth (the so-called fiscal effect), employment, innovation and the development of domestic infrastructure.
Increased demand for armaments in 2024-2035 will generate PLN 1.301 trillion (EUR 305.5 bln) in additional GDP, which represents approximately 38 percent of GDP in 2023 and is higher than the original value of expenditure.
According to the bank's experts, capital expenditure (equipment, infrastructure) in the defence sector under optimal conditions, i.e. with large fiscal space and low dependence on imports, may generate multiplier effects exceeding 1.5 in the first few years.
seb/ ao/