* EBRD backed Polish energy with 100 mln euros in 2016
* This compares to around 250 mln euros in past years
* Quotes law, subsidy system as reasons for investment slump
* Still expects to finance Poland's first offshore wind
By Agnieszka Barteczko and Anna Koper
WARSAW, April 13 The European Bank for
Reconstruction and Development has cut its financing of wind
farms in Poland because there are fewer projects as government
policies have made them unprofitable, a top EBRD official said.
Private investors spent around 34 billion zlotys ($8.5
billion) on the construction of wind farms in Poland in the past
few years, helping the country become less reliant on coal and
taking it closer to European Union carbon emissions targets.
"These investors are now suffering significant losses and
are unlikely to incur new investment in Poland," Grzegorz
Zielinski, EBRD's Poland chief, told Reuters.
"I'm afraid that this could translate into a negative
perception of Poland as a country unfavourable for private
investors in regulated sectors," he added.
Overall investment in Poland, across industries, fell 5.5
percent last year, the biggest decline in 14 years, according to
the statistics office data.
In the energy sector, the ruling Law and Justice party (PiS)
wants coal to remain Poland's dominant source of energy for many
years. It sees renewable energy as unstable and has introduced
laws on wind farms that have made many of them unprofitable.
In 2016 the government unexpectedly banned building wind
farms too close to dwellings and imposed a higher property tax
on wind farm owners.
The subsidy system for renewables, based on tradeable green
certificates, has also become oversupplied and caused a slump in
prices, which has hit wind farms' cashflows.
Critics say such policies may lead Poland to miss the EU
target of generating 15 percent of its electricity from
renewable sources by 2020.
EBRD provides financing for energy projects aimed at
reducing emissions, mostly renewable sources and power
distribution. It spent around 100 million euros on energy
projects in Poland in 2016, down from around 250 million euros
annually in the previous years.
"Following a fall in investment in renewables (in general)
EBRD also reduced investment in the energy sector in 2016,"
EBRD backed one of the country's biggest wind farms Banie,
in northwest Poland, last year, together with local lenders
Alior Bank and BOS. The latter said in March
it booked a $25 million writedown on wind-farm related loans for
"We hope that 2017 will be an improvement when it comes to
our investments in energy in Poland, but due to the investment
uncertainty we do not expect a sudden increase in private
investment," Zielinski said.
Poland's biggest private utility Polenergia and
state-run PGE are due to launch the country's first offshore
wind farms after 2022.
"We hope that these projects will go ahead and that we will
take part in their financing," Zielinski said.
This year EBRD expects to spend a similar amount in Poland
to 2016 when it provided financing of 780 million euros across
($1 = 4.0013 zlotys)
(Editing by Susan Fenton)