Baltic Power – an Orlen Group company – signed loan agreements with a consortium consisting of 25 Polish and foreign financial institutions to finance the construction project of an offshore wind farm located in the Baltic Sea, with a maximum capacity of up to 1,200 MW, Orlen reported. Based on the agreements, the consortium will grant Baltic Power an investment loan in the amount of EUR 3.6 billion for a period of 23 years. In addition, Baltic Power will have the opportunity to use additional and reserve credit lines in the amount of PLN 1 billion and EUR 0.6 billion, respectively.
The repayment of the loan granted to Baltic Power will be based on future financial surpluses generated by the offshore wind farm project. The loan will be released after the conditions precedent specified in the agreements are met.
The offshore wind farm project is being implemented by Baltic Power based on a joint venture agreement between Orlen, Baltic Power and NP Baltic Wind, a company from the Northland Power capital group. Orlen holds over 51% of shares in Baltic Power. The total budget of the project is estimated at approximately EUR 4.73 billion and includes investment expenses with insurance (in the amount of approximately EUR 4.05 billion), as well as financing costs and an additional reserve. Construction of the offshore wind farm is scheduled to begin in 2023, and the investment will be commissioned in 2026.
It is estimated that after the implementation of the project, during the first 5 years of its operation, Baltic Power may generate additional free cash flow in the amount of EUR 140 million on average annually, and the operating profit plus depreciation and amortization (EBITDA) of Baltic Power may reach approx. EUR 400 million on average per year (of which Orlen’s share is 51%), according to the announcement.
The Baltic Power offshore wind farm will consist of 76 turbines with a unit power of 15 MW and a height of over 200 meters, operating in an area of approximately 130 km2. The farm will be located approximately 23 km from the coast, near Choczewo and Łeba, where the farm’s service port will be built. Once construction is completed, the farm will be able to power over 1.5 million households with clean energy.
The PKN Orlen Group manages refineries in Poland, the Czech Republic and Lithuania, conducts retail operations in Central Europe, mining operations in Poland, Norway, Canada and Pakistan, and is also engaged in energy production, including renewable energy sources and natural gas distribution. As part of the construction of a multi-energy concern, the company finalized the acquisitions of Energa, Grupa Lotos and PGNiG. Its consolidated sales revenues reached PLN 277.56 billion in 2022. The company has been listed on the WSE since 1999.