The popularity of Poland as a destination for foreign direct investment (FDI) is well documented. Ever since the liberalisation of the economy in the 1990s, the country has succeeded in using FDI to kickstart economic growth — something that has continued through the pandemic. In 2021, greenfield FDI into Poland reached a record 424 projects, according to fDi Markets.

But with the war in Ukraine on its borders, Poland has welcomed more Ukrainian refugees than any other country. Grzegorz Słomkowski, member of the management board of Polish Investment and Trade Agency, tells fDi that the perceived proximity of war threatens the country’s post-pandemic FDI growth amid intensifying concerns over high energy prices.  

Q: What are the biggest challenges you currently face?

A: The war between Ukraine and Russia. Many investors are asking if it’s still safe to invest in Poland. Firstly, we have to prove to the CEOs of big organisations that Poland is still a safe place.

Next, of course, is 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 it's a difficult question because there are many, many issues regarding investments, but I think inflation is a big concern. Of course, this depends on the policy of the European Central Bank on the energy prices and on the stabilisation of the economy worldwide. 

Q: Is there a balance to be struck between the long-term sustainability agenda and today’s energy security? 

A: Actually, it’s a big topic at the moment because electricity prices are connected to the gas prices in the EU. So, suddenly, we have very expensive energy.

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

There is no one best solution — it should be a country-by-country approach. In Poland, our economy is traditionally based on coal, so we’re focusing on solar photovoltaic farms and we’re building two nuclear power plants. 

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

A: Regarding big-ticket foreign investments, Poland remains a stable investment destination. As an investment promotion agency, of course, we travel worldwide, we organise economic conferences in Korea, Japan and the US to attract and convince investors to come to Poland. But now, with the new geopolitical situation, we’ve seen some multinationals leave Russia and move into Poland and I would say that, in this context, the future of FDI is not only nearshoring, but friendshoring. We try to do business with the countries which share the same values and are on the same, let’s say, side. 

Grzegorz Słomkowski is a member of the management board of the Polish Investment and Trade Agency.

Mr Słomkowski was one of several IPA directors interviewed for a fDi podcast episode recorded at the WAIPA World Investment Conference 2022. Listen to the full episode here.