Aug 14, 2023
ORLEN's Supervisory Board has made a conditional investment decision for the Baltic Power offshore wind farm, enabling the finalisation of the design phase. The construction phase is planned to start later this year after the completion of the financing process and completion of construction permits. The joint investment of ORLEN and Northland Power at this stage is the most advanced offshore wind project in Poland.
The energy transition results in clean, accessible energy and a competitive economy. By 2030, ORLEN Group will have made a leap in the development of renewable energy sources, reaching 9 GW of installed capacity. Offshore wind energy will be a key element of this development. As regional pioneers in this area, we have had to do an enormous amount of preparatory and administrative work and build new competences that we will be able to use in future projects. Today's decision is a milestone that brings us significantly closer to achieving the Company's strategic objectives – stresses Daniel Obajtek, President of the Management Board of ORLEN.
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The Baltic Power project, in which ORLEN holds more than 51% of shares, is the most advanced offshore wind farm project under construction in Poland. The total finance plan for the Project is estimated at ca. EUR 4,73 bn and covers capital expenditures and contingency (in the amount of EUR 4,05 bn), as well as financing costs and additional reserve.
The shareholders of the investment assume that its financing will be carried out under the Project Finance formula, a model in which repayment of liabilities will be based on future financial surpluses generated by the project. The Project Finance formula is particularly favourable for investments that require significant expenditure and time to reach full capacity, such as the construction and operation of offshore wind farms. At the same time, it fits in with the financial assumptions of the updated ORLEN2030 strategy.
The Baltic Power project has all the permits for the onshore part of the project, as well as a permit for the construction of an offshore power connection to bring power from the farm to land. It also has secured contracts for all key components of the farm - including turbines, offshore and onshore substations, cables and foundations - along with their manufacture, transport and installation. One of the conditions for reaching a final investment decision remains the acquisition of construction permits for the offshore part of the project.
The construction of the Baltic Power offshore wind farm is one of the ORLEN Group's key projects for achieving its strategic goal of 9 GW of installed renewable energy capacity by 2030. The farm will be built about 23 km from the coast, at the level of Leba and Choczew, and will consist of 76 state-of-the-art wind turbines with a unit capacity of 15 MW. With the completion of construction in 2026, the Baltic Power farm will begin producing energy to power more than 1.5 million households in Poland.