PFR TFI's Polish International Development Fund and Enprom invest in Germany

The Polish International Development Fund 2 FIZ AN (the “Fund”), managed by PFR TFI, has concluded an investment agreement with Enprom, one of Poland's largest companies in the power construction sector. As part of the project, the Fund will provide debt financing worth EUR 3.1 million to Enprom's subsidiary to promote its growth in the German market. This is one of the first investments of the Fund launched in 2023, which continues the mission of the Polish International Development Fund FIZ AN. 

Enprom provides comprehensive solutions for the design, construction and modernisation of power grids, distribution substations and medium-, high- and extra-high-voltage transformers. Enprom also prepares and implements investments in power generation systems, including those using renewable energy sources, and offers inspection and geospatial services using drones. The company executes contracts in Poland and abroad. Since 2017, it has been active in the German market, where it has secured significant contracts with transmission network operators. Financing under the Fund will enable the company to accelerate existing contracts and win new ones, allowing it to maintain double-digit growth rates in the German market. 

"The German market is very attractive for companies like ours, for general contractors of power generation projects. Although it is not easy to enter this market due to the need for certification and local references, we have largely completed this stage. A key advantage of the German market, in addition to its size, is the favourable contract execution conditions. Many of the risks associated with rising material prices, settling payments or covering downtime costs if the network cannot be switched off are borne by the contracting authority. This offers contractors more comfort and predictability. We want to take advantage of business opportunities and accelerate our growth beyond the Oder, thus diversifying the risks associated with focusing solely on the Polish market. To achieve this, we needed the right funding and the Polish International Development Fund offered us the right solutions"

      – explains Mariusz Targowski, President of the Management Board of Enprom.

"According to analyses, the power construction sector in Germany will grow dynamically in the coming years. Due to the shift away from nuclear and conventional energy and the green transition being implemented over the next decade, the national transmission networks will require significant expansion and modernisation, which represents a major growth opportunity for companies operating in this market, including Enprom. The company has been operating in Germany for several years, completing significant contracts and has references, certificates and relationships with major energy transmission companies. It is well positioned to take advantage of this opportunity. Given this strategic approach to overseas expansion and the company's past experience, business performance and growth plans, we decided to take on this project" 

- comments Piotr Kuba, Board Member, Chief Investment Officer at PFR TFI.

According to estimates, spending on energy infrastructure in Germany will reach around EUR 50 billion by 2028. The list of priorities includes dozens of projects involving the modernisation of existing transmission lines with a length of 3,000 km and the construction of new ones with a total length of 4,600 km, necessitated by the change in the model of energy generation in Germany, where conventional and nuclear power plants are located in the west and south of the country, while renewable energy installations, from which already more than 50% of energy is generated, operate mainly in the north. Importantly, power infrastructure and the related specialised construction sector are recognised by the federal government as a strategic area in which only EU entities can implement projects. This allows stable margins to be secured and ensures the consistent growth of power construction companies.

Another International Development Fund investment in Germany 

The project with Enprom is one of the first investments of the Polish International Development Fund 2 FIZ AN, which was established in 2023 in response to the increased interest of Polish companies in capital-intensive foreign expansion. Its target capitalisation is PLN 600 million. The Polish International Development Fund FIZ AN had previously invested in the German market on several occasions. It had carried out projects with such actors as: 

• the Elemental Group, operating in the global urban mining market, in the acquisition of a German company to provide financing to scale up the group's operations in the Western European car catalyst recycling market and enable its entry into the US market, 
• the Pekabex Group, a leader in modern system building in Poland, in the acquisition of a plant in Bavaria specialising in the production of prefabricated elements as a complementary asset to the plants in Poland, 
• the developer Victoria Dom in the development of real estate activities, mainly the purchase of land in attractive locations in Berlin and Leipzig for further residential investments, 
• with Laude Smart Intermodal, one of the largest logistics operators in Poland, in establishing a company in Germany to scale up the company’s operations in Western European markets and increase its revenue diversification, as well as to operate routes offering higher margins. The German company Laude is also key to building a logistics chain between the EU and Ukraine.