UK Markets closed

Poland's Pekao changes credit policy to allow financing of coal trading

·1-min read
UniCredit's Polish unit Bank Pekao logo is seen on their branch in Warsaw

WARSAW (Reuters) - Poland's Pekao has changed its credit policy to allow financing of coal trading as the country needs to pay for imports of several million tonnes of the fuel amid surging prices. "The exemption applies only to the financing of coal trade and is temporary. It results from the current situation on the raw materials market," the bank said in a statement e-mailed to Reuters on Tuesday.

Poland has faced a several-fold increase in coal prices and shortages of the fuel on the market after banning imports of coal from Russia in response to its invasion of Ukraine.

The European Union's top coal producer imported around 8 million tonnes of the fuel from Russia in 2021. It has been mostly used to heat 3.8 million households and to power smaller heating plants.

In July, the government ordered imports of 4.5 million tonnes of the fuel to fill a supply gap.

Pekao said it will keep the ban on the financing of new coal and lignite mining as well as coal-fired power generation projects as well as its policies on financing renewable power generation.

Under the strategy approved last year, Pekao targets reaching climate neutrality in 2030 and supports orderly transition to a low-emission economy.

(Reporting by Marek Strzelecki and Anna Koper, Editing by Tomasz Janowski and Ed Osmond)