Green Forum • 12 November, 2024 at 9:58 PM
The European Investment Bank (EIB) and ORLEN Group, Poland's largest energy company, signed a €200 million loan agreement for projects supporting energy transition.
The funds will be used to invest in strengthening and expanding the power grid of Energa, a distribution system operator majority owned by ORLEN. This new EIB support will help modernise electricity distribution in northern and central Poland, as well as allowing to connect more renewable energy sources (RES).
“This new transaction reaffirms the EIB's role as a trusted partner of multidimensional energy transition in Poland,” said EIB Vice-President Teresa Czerwińska. “As the climate bank of the European Union, the EIB supports strategic investments in energy efficiency, renewable energy sources, as well as stability and security of supply. We expect this seventh EIB financing agreement with ORLEN to further these objectives.”
EIB funding will support Energa's investment plan designed to improve security and efficiency of power supply. This entails adding new customers and increasing RES connection capacity by about 4.8 GW, as well as modernising the distribution network, upgrading distribution assets, and investing in smart grid components, including smart metering.
“Achieving carbon neutrality requires not only a shift in generation sources but also significant improvements in operational efficiency. The rollout of distributed generation, demand-supply balancing, and energy storage represent crucial challenges for Poland's economy. Effective energy management can provide a substantial competitive edge for both the Polish and broader European economies. Hence, large-scale investment programmes to upgrade our network are vital. The financing provided by the European Investment Bank will allow us to address these priorities while strengthening Poland's energy security,” said Ireneusz Fąfara, President of the Management Board and CEO of ORLEN.
The agreement between the EIB and ORLEN Group was concluded under REPowerEU, an EU programme aimed at increasing strategic autonomy of the bloc by diversifying energy supply and accelerating the green transition. By 2027, the EIB will provide €45 billion in loans and equity financing to advance REPowerEU objectives.
EIB financing in Poland under REPowerEU reached €1.78 billion last year, an 80% increase from 2022. Related agreements that have already been concluded this year include financing the modernisation of rail network power supply systems, and further deals are expected in the coming months.
Under the agreement with ORLEN Group, EIB funds will be disbursed in tranches over a three-year period from the execution date, with repayments spread over a maximum of 15 years from the initial disbursement.