For years Poland has resisted the EU’s climate goals, with policymakers seeing a move to renewables as a threat to the country's coal-dependent economy. However, even though climate tech is still at an early stage, Poland is now committed to investing millions in green start-ups.
When Małgorzata Walczak and Bartlomiej Pawlak from the Polish Development Fund Group (PFR) presented their idea to create a fund of funds (FOF) dedicated to energy transformation projects back in 2020, many were skeptical.
"When I talked about the fund three years ago, people looked at me like I was crazy. They suggested instead investing in projects with high returns, or at least combining support for green tech with backing up more general initiatives," Walczak, Investment Director at PFR GreenHub Fund of Funds, told the Warsaw Business Journal. However, she insisted on focusing on green tech.
The idea of the fund was born out of a passion for a green lifestyle and concerns over the climate change crisis. Walczak was committed to green choices since childhood when her aunt taught her to wash dishes without running water. She emphasizes that small steps such as closing the tap when brushing teeth or not wasting food can drive change. However, a significant transformation, in her view, will not be possible without the use of technology.
Ekoenergetyka
Pawlak, Vice-President of the Management Board at the Polish Development Fund, said a heated discussion about whether to create a fund with a very strict frame of activities that the venture capital (VC) will select or to be more generic lasted for about half a year. "Some of my colleagues said that sticking to green projects only would lower the number of funds that would be interested in joining this initiative," he explained.
"But I believed from the beginning that the idea of the green fund is an asset for a potential business, not a liability, because every technological company should be green nowadays. It is not the future of the business anymore; it's the present."
The initiative called the PFR Green Hub Fund of Funds was a success. In February, the fund announced an investment of EUR 55 million in four green VC funds. Out of forty VC funds that applied, twenty made it to the shortlist, and eventually, the fund signed contracts with four.
So far, PFR GreenHub has invested in Lithuania's Contrarian Ventures, French VC Eurazeo's Smart City fund, the global growth equity firm General Atlantic's BeyondNetZero fund, and Poland's Montis Capital. Although three out of four funds are foreign, they committed to investing part of the money raised in Poland. "I hope we will have more Polish funds joining in the future," Pawlak noted.
Pawlak says he is inspired by Polish companies developing innovative solutions like Ekoenergetyka, founded in 2009 by two students from the University of Zielona Góra who developed a charging system for electric vehicles. A major success came in 2017 when Poland launched a program to develop low-emission transport. Ekoenergetyka was the only company that could deliver charging solutions for electric buses. Now, Ekoenergetyka is present in 28 countries and employs more than 700 people.
"I dream of having ten or twenty companies like Ekoenergetyka in Poland in the foreseeable future because we aim to build strong Polish technology companies that will operate on the domestic market and internationally," he stressed.
Walczak found her inspiration in Bill Gates' Book "How to Avoid a Climate Disaster," which presents strategies for achieving net zero greenhouse gas emissions by 2050 through innovations and highlights the role of technology in resolving climate change problems.
She noted that while numerous green start-ups provide software technologies in Poland, sectors such as food and fashion are often overlooked. "In fashion, for instance, tons of toxic polyester are thrown away, and I hope that the companies we invest in will find technological solutions to help resolve similar issues," she said.
"We believe that venture capital can bring change because each transformation is not led by the big corporations. It has to begin with the start-ups," Walczak concluded, adding that the more green tech VC funds will be present in Poland, the quicker the transformation will happen.
Climate tech investments in Central and Eastern Europe (CEE) grew from $10.6 million in 2013 to $398 million in 2020 and over $502 million in the first half of 2021 alone, according to the PwC Net Zero Future50 report, produced in cooperation with Wolves Summit. But despite being the largest economy in the region, Poland has raised only 4.65% of total climate tech funding in the CEE between 2013 and the first half of 2021.
Pawel Wiejski, the EU climate policy analyst at the Institute of Green Economy, said Poland's energy mix dominated by coal is a significant obstacle to green tech development. "We can see that specifically in the batteries sector, where none of the planned new gigafactories in the EU will be located in Poland. Manufacturers are mindful of their products' carbon footprint, which will be a growing problem in the future," he said.
Another key obstacle is regulatory constraints. Since 2016, new wind turbine installations in Poland must be built at a minimum distance of ten times the height of an onshore wind power plant between the farm wind and residential buildings. In practice, this blocked new project developments. In February this year, the Polish parliament approved a law that should make the construction of onshore wind turbines easier. However, the wind industry and the opposition were critical of the solution, claiming that the measures were insufficient.
On the other hand, Wiejski highlighted that the war in Ukraine could accelerate the green tech transition in Poland. He noted that Poland hopes to participate in the reconstruction of Ukraine and build it back with modernized infrastructure. "This is an opportunity for growth of the Polish green tech sector," he said.
Pawlak from PFR also noted that the war speeded up the transition to renewables because of the awareness that climate goals play an important role in national security. "Poland realized that a green future is inevitable, and this is a big mental shift," he said.
Although there are not many green tech companies in Poland, some start-ups have thrived thanks to their innovative solutions.
Kraków-based SEEDiA builds intelligent infrastructure for smart cities, such as solar-powered benches, bus stops, and electromobility charging stations. Founded in 2016 by entrepreneurs Artur Racicki and Piotr Hołubowicz, the company focuses on optimizing services for citizens while reducing their costs. Its solar benches, for example, are equipped with a USB port, WiFi hotspot, and inductive charges, with which people can charge a phone by simply putting it on a designated part of the bench.
Solar benches are already installed in several Polish cities, including Poznań and the famous spa resort Busko-Zdrój. The benches have a built-in cloud service that allows authorities to remotely monitor the device's status, analyze the number of users, and get data in the form of graphs.
Polish start-ups also make their mark internationally. For instance, e-mobility software developer Codetain is taking part in a project to make the island of Porto Santo on the archipelago of Madeira the first fossil-free island in the world. In 2018, a local energy supplier Empresa de Electricidade da Madeira, the Mobility House, a green tech company, and carmaker Renault signed a partnership to create technology for the project. The plan was to use electric car batteries connected to the power grid to store energy generated by renewable sources. In collaboration with the Mobility House, Codetain plays its part by developing software that supports electric vehicle chargers and makes it easier for the user to control energy consumption, storage, and distribution.
