War in Ukraine and energy prices threaten Polish FDI | fDi Intelligence – Your source of information on foreign direct investment



Poland’s popularity as a foreign direct investment (FDI) destination is well documented. Since the liberalization of the economy in the 1990s, the country has managed to use FDI to boost economic growth, which has continued during the pandemic. In 2021, greenfield FDI in Poland reached a record 424 projects, according to fDi Markets.

But with the war in Ukraine on its borders, Poland has taken in more Ukrainian refugees than any other country. Grzegorz Słomkowski, Member of the Board of Directors of the Polish Investment and Trade Agency, tells fDi that the perceived proximity of war threatens the country’s post-pandemic FDI growth amid growing concerns about high energy prices.

Q: What are the biggest challenges you are currently facing?

A: The war between Ukraine and Russia. Many investors ask if it is still safe to invest in Poland. First, we need to prove to the CEOs of big organizations that Poland is still a safe place.

Then, of course, the rise in energy prices as a result of the war. Investors are worried about electricity prices, gas prices and the shortage of energy supply. As for the third challenge, I will say that it is a difficult question because there are many, many problems concerning investments, but I think inflation is a big concern. Of course, this depends on the policy of the European Central Bank on energy prices and the stabilization of the world economy.

Q: Is there a balance to be found between the long term sustainable development agenda and energy security today?

A: In fact, it’s a big topic right now because electricity prices are tied to gas prices in the EU. So suddenly we have very expensive energy.

There is a big discussion at EU level whether it is correct to link private energy prices to the price of gas itself, or rather to calculate some kind of mix with renewables, because they now benefit from high natural gas prices. Of course, in the long term, we should be carbon neutral, but it will take a few years, especially now, when this market has been destabilized by Russia’s war with Ukraine.

There is no better solution – it should be a country-by-country approach. In Poland, our economy is traditionally based on coal, so we focus on solar photovoltaic farms and we are building two nuclear power plants.

Q: Europe is in the throes of crises on all sides. What does the future of FDI look like in this context?

A: Regarding large foreign investments, Poland remains a stable investment destination. As an investment promotion agency, of course, we travel all over the world, we organize economic conferences in Korea, Japan and the United States to attract and convince investors to come to Poland. But now, with the new geopolitical situation, we have seen some multinationals leaving Russia and moving to Poland and I would say that in this context, the future of FDI is not only nearshoring, but friendhoring. We try to do business with countries that share the same values ​​and are, let’s say, on the same side.

Grzegorz Słomkowski is a member of the Board of the Polish Agency for Investment and Trade.

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