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Poland’s state-owned energy company, Orlen, announced a major milestone in its renewable energy ambitions as its subsidiary, Baltic Power, secured €3.6 billion in credit agreements for the construction of a 1.2 GW offshore wind farm in the Baltic Sea. The project, known as the Baltic Wind Farm, is set to be located in the Polish Exclusive Economic Zone and aims to become a key player in Poland’s green energy transformation.
Baltic Wind Farm: A Renewable Energy Powerhouse
The financing agreements were inked with a consortium comprising 25 Polish and international financial institutions. Baltic Power is set to receive a 23-year investment credit, alongside the option to tap into additional and reserve credit lines totaling €1.0 billion and €0.6 billion, respectively.
Upon completion, Baltic Power anticipates generating approximately €140 million in annual free cash flows during the first five years of operation, with Orlen holding a majority 51 percent stake. Additionally, the project’s estimated average annual EBITDA (earnings before interest, taxes, depreciation, and amortization) stands at around €400 million, with Orlen retaining a significant 51 percent share.
Strategic Renewable Energy Expansion
Orlen’s strategic vision includes achieving around 9 GW of installed capacity in renewable energy sources by 2030, with a substantial portion coming from offshore wind projects. The Baltic Wind Farm project, undertaken in partnership with Canadian company Northland Power Inc., represents the most advanced offshore wind venture in Poland.
Construction work on the onshore infrastructure, facilitating the transfer of offshore-generated electricity to the national grid, began in May in the municipality of Choczewo. Offshore construction is slated to commence in 2024, with the Baltic Power wind farm expected to start producing electricity in 2026.
Orlen: A Diversified Energy Giant
Orlen, one of Poland’s energy leaders, operates seven refineries (including four in Poland), a network of approximately 3,100 fuel stations, and a robust petrochemical and hydrocarbon exploration segment. The company is actively investing in renewable energy ventures such as wind and solar farms. By 2030, Orlen aims to commission at least one small modular nuclear reactor (SMR). The Polish government holds a 49.9 percent stake in Orlen.
Poland’s Baltic Wind Farm is a significant step toward the country’s renewable energy targets, underlining its commitment to a greener future and reduced carbon emissions. The project’s successful financing marks a substantial milestone in Poland’s transition to a sustainable energy landscape.