May 26, 2017 / 12:05 PM / 2 years ago

Polish fund targets $2.15 billion for infrastructure, energy

WARSAW (Reuters) - Polish state-run fund PFR hopes to invest 8 billion zloty ($2.15 billion) within the next 12 months, mainly in infrastructure and energy, its Chief Executive Officer Pawel Borys told the Reuters Central & Eastern Europe Investment Summit.

“Within the last 12 months PFR’s investments, including Pekao stake, amounted to 8 billion zloty. It would be good to repeat this sum in the coming year,” Borys said.

“Our priority is still infrastructure. (The) energy sector is also important. We can spend on this sector potentially even several billion zloty,” he added.

Poland created PFR last year from a previous state fund, with the aim of developing Central and Eastern Europe’s biggest country and boosting its economic growth.

The fund may combine with listed companies on some energy projects this year and may supply financing worth almost 1 billion zloty to Jaworzno III - a new power unit at the state-run firm Tauron Polska Energia (TPE.WA), Borys said.

PFR bought a 12.8 percent stake in the country’s second largest lender Bank Pekao SA (PEO.WA) last year from Italy’s UniCredit (CRDI.MI) as part of a “repolonisation” scheme.

The Pekao stake may be held for longer than the planned three-five years, Borys said, as its dividends are attractive. Pekao’s planned payout will contribute to PFR’s 2017 net profit, which he estimated at more than 150 million zloty.

Pekao, which is strong in corporate banking and retail banking for affluent Poles, should develop in advisory services and insurance, Borys said, adding that investment in technology must be a priority for the bank, particular in retail services.

Borys also suggested that Pekao joins BLIK, a local mobile payment standard that originated from PKO BP (PKO.WA), Poland’s number one bank, where Borys previously worked.

In a planned overhaul of Polish pensions, 25 percent of assets in private pension funds, which hold assets worth 176 billion zloty, will be transferred to the state-run FRD fund, Borys said, dismissing reports that this amount may be higher.

Under the new system, pensioners will only be able to make gradual changes to the fund strategy in order to avoid dramatic moves in stocks, he added.

Borys said the transfer will primarily include cash, corporate bonds, shares in foreign companies and eventually shares in Polish companies. These will not be cashed before the transfer, he said.

Editing by Alexander Smith

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