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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure PL-2021-15/1877 Updated – measures in Poland

Liquidity loan for Polish Mining Group

Polska Grupa Górnicza otrzymuje od PFR miliard złotych pożyczki płynnościowej

Country Poland , applies nationwide
Time period Temporary, 08 April 2021 – 28 February 2025
Context COVID-19
Type Company practices
Category Supporting businesses to stay afloat
– Access to finance
Author Jan Czarzasty (Warsaw School of Economics) and Eurofound
Measure added 15 April 2021 (updated 27 May 2021)

Background information

In late March the application of the Polish Mining Group (Polska Grupa Górnicza, PGG) for financial aid under the Financial Shield 2.0 scheme was approved. As a result the company will receive a liquidity loan of PLN 1 billion from the Polish Development Fund (Polski Funusz Rozwoju, PFR). The loan will have to returned by the end of February 2025. In 2020 due to the pandemic, PGG's mines operated in a limited capacity in the spring months. Furthermore, the energy sector also reduced their demand for hard coal. As the company duly proved the financial loss it suffered due the pandemic, PFR positively reviewed the application.

Content of measure

In early April, PGG received the whole amount granted. The loan will have to be paid off by the end of February 2025. The financial means from the liquidity loan will be used to settle trade liabilities (including purchases of goods and materials), salaries and employee benefit costs, public-law liabilities (such as fees and taxes) and other expenses related to financing the company's day-to-day operations, as set out in the loan agreement and approved by the PFR. Considering PGG volume of employment is approximately 40,000, so the total amount of monthly wages is over PLN 300 million.

Updates

The following updates to this measure have been made after it came into effect.

21 May 2021

The loan is set to be repaid by the end of February 2025 according to the loan agreement.

Use of measure

The loan has just been received by the company. Use of the financial means of the loan and repayment are yet to be seen.

Contents

  • Income protection

Target groups

Workers Businesses Citizens
Does not apply to workers Larger corporations
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted No involvement
Form Direct consultation outside a formal body Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Company level

Involvement

Trade unions maintained pressure on the board to take all steps necessary to ensure business continuity for several months. Trade unions argued that without the aid from the PFR the company would likely fail to cover the current wage obligations for the staff. The monthly volume of wages amounts to some PLN 300 million (about €65 million).

Views and reactions

Supportive.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      B - Mining And Quarrying B5 Mining of coal and lignite

This case is not occupation-specific.

Sources

  • 02 April 2021: Aid for the Polish Mining Group (Wsparcie dla Polskiej Grupy Góniczej) (mediapfr.prowly.com)
  • 08 April 2021: Polish Mining Group received a PLN 1 billion liquidity loan from PFR (Polska Grupa Górnicza otrzymała od PFR miliard złotych pożyczki płynnościowej) (www.bankier.pl)

Citation

Eurofound (2021), Liquidity loan for Polish Mining Group, measure PL-2021-15/1877 (measures in Poland), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/PL-2021-15_1877.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.