EBRD allocates €140 m loan for backing Poland’s first offshore wind farm

21 / 09 / 2023

• Knowledge Bank
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The European Bank for Reconstruction and Development (EBRD) earmarks a €140 million loan for supporting the development of Poland’s renewable energy capacity to Baltic Power to finance the construction of the country’s first offshore wind farm.

The EBRD’s financing is provided alongside that from a large number of international and local commercial lenders, the European Investment Bank (EIB) and export credit agencies.

Once operational, the wind farm, which will have a capacity of up to 1.2 GW, is expected to generate electricity equivalent to 4,000 GWh or approximately 2-3 per cent of Poland’s current electricity generation. It will help to avoid approximately 2.8 million tonnes of CO₂ emissions annually. The project is a landmark transaction for the EBRD, central Europe and Poland, representing a significant step in the transformation of Poland’s energy sector.

Poland has committed to substantial decarbonization goals and, in line with the wider European energy sector, is targeting offshore wind power to increase electrification and reduce its coal-fired energy generation.

Nandita Parshad, Managing Director of the EBRD’s Sustainable Infrastructure group, said: “Offshore wind energy is crucial to support the global drive to net zero and to provide a solution to energy security concerns. This is why we are proud to support this landmark project: the very first offshore wind farm not only in Poland, but in the entire EBRD region. The acceleration of the green transition is a primary focus for the EBRD, and this project is a sterling example of how we can scale up renewables from megawatts to gigawatts.”

Baltic Power is a special purpose vehicle incorporated in Poland to develop, build and operate the wind project in the Baltic Sea. It is jointly owned by ORLEN, the Polish multi-utility company, and Northland Power, a Canadian independent power producer with significant experience in offshore wind.

“Today’s announcement is a major achievement for Northland, our partners and the Baltic Power project,” said Mike Crawley, President and Chief Executive Officer of Northland Power. “This milestone demonstrates the support from the global financial community and reflects their confidence in Northland and our ability to develop, procure, construct and finance large and complex offshore wind projects. Despite the recent challenges for the offshore wind sector in some markets, Northland continues to find a way to advance large-scale offshore wind projects with attractive economics.”

Daniel Obajtek, CEO and President of the ORLEN Management Board, noted: “We are in the final stages of preparing a large-scale project that will significantly change Poland’s energy mix. Our robust financial footing and extensive international experience in managing large-scale projects equip us to handle this process effectively. Despite the highly dynamic environment, we are on track with the Baltic Power project’s preparation, with the goal of providing clean energy to more than 1.5 million households as early as 2026. Securing financing for the project demonstrates that the financial markets also have a positive view of ORLEN’s strategic investments through 2030.”