The offshore wind sector in Poland is about to experience a seismic shift, as Equinor and Polenergia have secured over €7.2 billion in project financing for the Bałtyk 2 and Bałtyk 3 wind farms. This monumental step, achieved through a consortium of around 30 financial institutions, including the Nordic Investment Bank and the European Investment Bank, underscores the growing confidence in offshore wind as a viable and profitable energy source.
The Bałtyk 2 and Bałtyk 3 projects, each with a capacity of 720MW, are set to become Poland’s largest offshore wind farms, consisting of 100 fixed-bottom turbines situated 22-37km off the Polish coast. The financial close, reached on 19 May, marks the final major hurdle before full-scale construction begins. Equinor, responsible for the construction phase and future operation, has secured competitive terms and conditions, reflecting strong lender interest and validating the projects’ attractiveness.
The projects, awarded Contracts for Difference (CfD) in 2021, secure power prices at approximately €71 per MWh for 25 years, with inflation indexation. This long-term price stability is crucial for attracting investment and ensuring the projects’ financial viability. Moreover, the high gearing of approximately 80% demonstrates lenders’ confidence in the projects’ profitability and Equinor’s ability to deliver on its expected double-digit nominal equity rate of return for renewables and low carbon investments.
The Bałtyk 2 and Bałtyk 3 projects are not just about generating clean energy; they represent a significant step in Poland’s energy transition and industrial future. As Michał Jerzy Kołodziejczyk, Equinor’s country manager in Poland, stated, “These wind farms are set to contribute to Poland’s industrial future by producing renewable electricity for Polish households, creating employment opportunities, and enhancing both energy security and the energy transition.”
The projects’ development will also stimulate the local economy, with onshore construction work already underway and fabrication of key components initiated. Marine operations are set to commence next year, with full commercial power production expected in 2028. Danske Commodities, an Equinor subsidiary, will provide route-to-market services, including balancing and power offtake for the first three years of operations.
The successful financial close for Bałtyk 2 and Bałtyk 3 sends a clear signal to the market: offshore wind is a bankable and attractive investment opportunity. As Trine Borum Bojsen, Equinor’s senior vice president for Renewables in Europe, noted, “Building a profitable renewables business through safe execution and operations is key to delivering on Equinor’s strategy.” This milestone is likely to spur further investment in the Polish offshore wind sector, accelerating the country’s transition to a low-carbon future.
The Bałtyk 2 and Bałtyk 3 projects also highlight the importance of strategic partnerships in the energy sector. The 50-50 joint venture between Equinor and Polenergia has proven successful in securing financing and navigating the complex regulatory landscape. This collaboration serves as a model for other developers seeking to unlock the potential of offshore wind in Poland and beyond.
As the offshore wind sector in Poland gears up for a new era, the Bałtyk 2 and Bałtyk 3 projects stand as a testament to the power of strategic partnerships, innovative financing, and unwavering commitment to a sustainable future. The coming years will be pivotal in shaping Poland’s energy landscape, and the success of these projects will undoubtedly play a significant role in that transformation. The sector is watching closely, and the stakes have never been higher.