Pracownia Finansowa is a Polish investment company focused on high net worth individuals and collecting capital through crowd funding systems for energy investments. The company’s portfolio gathers 750 individual investors with a total value of PLN 154 million.
What makes Poland such an attractive market for investors in your portfolio?
The energy market in Poland has demonstrated a great return on investment. Our business model offers attractive passive income as our business is based on shares in different enterprises and investors become a co-owner in all of our assets. They usually expect more than 10% return on investment and good wind energy projects can deliver this return in a relatively short period.
How would you describe the typical investor you work with?
The profile of our investors are mainly men entrepreneurs in their 50s who are looking for real projects which will generate profit. They are attracted to the fact that wind energy projects generate profit and are also ethical in terms of environmental sustainability. Over the years, we have built a great database of investors to which we can recommend projects. We also market the company through online platforms to attract more investors.
What would you say are the most common risk associated with investments in the energy space in Poland?
One of the greatest risks has to do with changes in regulations. In our existing projects we have eliminated, however, as much as possible these risks through not using donations and bank credit. You are surely aware that for a while no new turbines were built in Poland - because of this strategy to avoid using bank credit our projects did not go under water and instead continued to generate earnings.
Another risk is that energy prices are controlled by government and thus susceptible to change. We do however expect the energy prices to be growing strongly in the years to come.
Can you please expand on the reasons that halted development in the wind sector?
The distance act was the main challenge as it made it almost impossible to acquire new locations for wind farms. Likely the government introduced this restriction in an effort to protect coal mines. Since then, however, conditions have improved and our business is overall still profitable.
Do you believe that the 10H rule will be changed in 2020?
I hope that this rule will be changed in the very near future as it would work to the benefit of the overall sector. It is interesting to note though that the value of our projects (with the building permit got basing on old principles) has actually increased because of this rule, because investors have fewer options to choose from.
If the regulation does not change we still see good opportunity because the secondary market will increase going forward. The plan is to act as an intermediary in this secondary market where investors will be buying and selling shares to each other.
Do you already have a sense of how the COVID-19 outbreak will be impact your business/the energy sector in the short term?
The price of energy has dropped a bit because of lower consumption at COVID-19 outbreak, but in some projects we have contracts with a fixed price, so this situation isn’t matter to these investments.
Renewable energy is privileged in the energy market. When the consumption is lower, coal power plants will be the ones that will have to reduce production, not wind farms.
Some investors are waiting for more stable times to join any investment projects. They have to make sure if they will not have to spend their saved capital on current consumption or to save their own business. However, there are also that kind of investors who see the opportunity in joining to our projects now. Not only because of attractive profits, but that kind of investments can also give them a way to save capital against the inflation. It is a result of selling energy at prices correlated with rising prices on the market.
What first measures did you set in place to manage the crisis?
First of all, we are working all the time. Our wind farm construction process has not stopped – work is progressing. Management and administrative team are staying at home, working in the home-office formula and waiting for normality. Investors can meet with us using a web-based tools, in which we have a lot of experience, because we have been doing it since the beginning of the company.
COVID-19 outbreak did not affect our business a lot and did not stop our activities. We do not forget that outside the window there is a world, where we want to return. The world and climate that needs investments in renewable energy sources.
