Integrated report 2021

Credit risk is related to a potential credit event that may take the form of a counterparty’s insolvency, only partial repayment of receivables, a material delay in repayment of receivables or other deviation from contractual terms (including, in particular, failure to deliver and receive agreed goods in accordance with the contract and possible non-payment of damages and contractual penalties).

PGE Group companies are exposed to credit risk arising in the following areas:

  • core business of the companies – sources of credit risk include, inter alia, transactions for purchase and sale of electricity and heat, transactions for purchase and sale of property rights to electricity certificates of origin and CO2 emission allowances, transactions for purchase and sale of fuels, etc. This concerns, among other things, the possibility and lack of payment by counterparties and customers of PGE Group or the fulfilment of their delivery obligations towards a company of PGE Group if the fair value of the transaction is positive from the Group’s point of view;
  • investment activities of entities – the credit risk results from transactions resulting from investment projects which depend on the financial situation of the Group’s suppliers;
  • investing free cash of entities – the credit risk results from investing free cash of the PGE Group entities in securities bearing credit risk, i.e. financial instruments other than those issued by the State Treasury.

There are significant concentrations of credit risk within PGE Group related to trade receivables. The three most significant customers accounted for approx. 12% of the trade receivables balance.

Maximum credit risk exposure resulting from PGE Group’s financial assets is equal to the carrying value of these items.

Year ended December 31, 2021 Year ended December 31, 2020
Trade and other financial receivables 7,931 5,003
Cash and cash equivalents 6,733 4,189
Derivatives – assets 939 555
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