Investment programmes in the energy industry are cyclical due to the scale of investments. PGE Group uses debt financing in order to speed up growth. 

We invest funds generated from operating activities, while the debt market allows us to increase the scale of our investments and shorten the time necessary to implement them.

The construction of the largest infrastructural projects lasts 4-5 years, and their repayment period is another 20 years. In as far as possible, we try to adapt debt maturities to the project's investment horizon.
Our long-term financing strategy provides for the diversification of sources, taking into account:

  • credit facilities from commercial banks,
  • preferential financing and
  • debt instruments.

Nearly all of PGE's cash flows are generated in Polish zloty, therefore naturally we look for financing from domestic sources. The eurobond market's advantage is high liquidity and flexibility.

The key parameters taken into consideration in selecting financing are: optimal costs, sufficient liquidity (market depth) and time horizon (maturity).

Debt level

At the end of 2016, PGE Group's total debt (gross debt) amounted to PLN 10 billion. It should be underscored that cash on PGE Group's accounts as well as deposits amounted to PLN 4.9 billion. This means that net debt amounted to PLN 5.1 billion. The main source of debt financing was credit facilities and loans (PLN 6.2 billion) and bonds (PLN 3.8 billion).

On a relative basis, taking into account the company's scale, PGE Group's debt level is moderate. At the end of 2016, net debt to EBITDA was 0.7x.
This ratio is considered safe by the Group's Management Board when it is under 3.0x. Compared to European energy companies, PGE Group remains one of the least-indebted entities.

Creditors around the world have one thing in common - they want to be sure that they will receive the money they have lent (debtor default is the main source of concern for every lender).
Moderate debt and a strong market position mean that PGE Group's debt instruments are perceived as a relatively safe investment. This is confirmed by credit ratings.

Rating agency



Issuer rating



Rating outlook



Rating upheld date

November 2016

August 2016