The overall project budget is estimated at about EUR 4.73bn and includes capital expenditures with insurance of approximately EUR 4.05bn, as well as financing costs and an additional reserve. The construction of the farm is slated to commence in 2023, with the offshore segment following in 2024, and the project is expected to become operational in 2026. During the initial five years of operation, the Baltic Power project could generate an additional average annual free cash flow of approximately EUR 140m.
The repayment of the credit facility will be funded through the future financial surpluses generated by the project. The project will be financed under the Project Finance framework, which is well-suited for projects with significant capital requirements and extended timelines to achieve full operational capacity. The syndicate supporting the project comprises 25 financial institutions, encompassing both Polish and international commercial banks, export credit agencies (ECAs), and multilateral institutions, including the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Euler Hermes, Export and Investment Fund of Denmark, and Export Development Canada. The project financing accounts for 80% of the expected total capital costs, with the project partners contributing the remaining capital.
‘The Baltic Power project is progressing in accordance with the approved schedule, and securing the financing marks a significant milestone in its development phase. This accomplishment was made possible thanks to the unwavering support and dedication of the project’s shareholders, ORLEN and Northland Power, and their effective cooperation throughout the preparation process,’ said Jarosław Broda, President of the Baltic Power Management Board.
Baltic Power is the most advanced offshore wind project in Poland. The project has successfully secured contracts for all key components, including turbines, offshore and onshore substations, cables, and foundations, and their respective manufacturing, transport, and installation. It also holds construction permits for the onshore part of the project and a permit for the construction of an offshore power connection to facilitate the transmission of electricity from the offshore wind farm to the mainland.
The construction of the Baltic Power offshore wind farm stands as one of the ORLEN Group’s key projects in pursuit of its strategic objective to achieve 9 GW of installed renewable energy capacity by 2030. The farm will be located approximately 23 kilometres off the coastline near Łeba and Choczewo, and it is designed to comprise 76 state-of-the-art wind turbines, each with a unit capacity of 15 MW. Upon its completion in 2026, the Baltic Power wind farm will start producing electricity to power over 1.5 million households. ORLEN Group owns more than 51% shares in Baltic Power.