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PGE signs ESG-linked loan with Polish Development Bank

Polish state-owned energy company Polska Grupa Energetyczna (PGE) announced last Thursday (28 November) that it has signed a 2.5 billion zloty (576 million euro) loan agreement with the Polish Development Bank (Bank Gospodarstwa Krajowego).

The loan interest rate will be calculated on the basis of a variable interest rate based on the appropriate reference rate (WIBOR) plus a margin. The loan margin may be adjusted depending on the ESG (Environmental, Social and Governance) rating awarded to PGE by an independent specialised agency.

The financing period is five years from the date of the agreement, with the possibility of extending it for a period not exceeding three years, PGE said in a press release.

“Effective implementation and communication of ESG principles translates into the possibility of obtaining cheaper financing, which in turn reduces the costs of energy transformation and the Group’s current operations. Linking loan financing costs to the PGE Group’s ESG rating confirms that sustainable development in the PGE Group’s operations is of strategic importance,” said Wojciech Dąbrowski, President of PGE’s Management Board.

According to the terms of the agreement, PGE aims to maintain the consolidated net debt to consolidated EBITDA ratio at a level not exceeding 4:1 in the event that PGE holds an investment-grade rating (i.e., BBB- or higher as awarded by S&P or Fitch, or Baa3 or higher as awarded by Moody’s).

Alternatively, the ratio should not exceed 3.5:1 if PGE does not have an investment-grade rating. Currently, PGE holds a BBB+ rating from Fitch and a Baa1 rating from Moody’s, both with a stable outlook, PGE said in the press release. 

PGE separately announced on Thursday (28 November) that it has received the “Climate-Aware Company 2023” award as part of the Corporate Climate Crisis Awareness study (CCA).

The study was conducted based on the content of non-financial reports for the year 2022. PGE scored 8.33 out of 10 possible points, securing the 17th position among the 152 largest companies listed on the Warsaw Stock Exchange.

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