Financial package to promote generation of green energy

The EBRD has signed a PLN 125.9 million (€29 million)-loan agreement to support a wind farm project in Tychowo, northern Poland, with a generation capacity of 50MW of “green energy”. The wind farm is expected to start operation in December this year.

Total project cost will amount to PLN 346 million (€79 million) and will be co-financed by the EBRD and the bcp Millennium Group. The recipient of the funds is Megawatt Baltica Sp z o.o., a subsidiary of the international hydro and wind project developer and investor RP GLOBAL.

Poland has significant need for new power generation capacity. The country to a large extent still depends on coal and lignite and many power plants are approaching the end of their operational life. This and the implementation of EU environmental standards means that by 2025 Poland will have to replace up to 35 percent of its present power generation capacity.

Renewable sources of energy are thus becoming more and more important. Producers of renewable energy benefit from obligatory off-take and receive a “green certificate” for each MWh produced. Any company supplying energy to an end-user in Poland has to buy these certificates which is making the generation of “green energy” more attractive by creating additional revenues for the producers.

Nandita Parshad, EBRD Director, Power & Energy Utilities, said: “We strongly support this project because it combines the development of renewables as alternative sources of energy with market-based financial solutions. Under the current financial conditions the EBRD’s contribution is crucial to the financing of this project. In the long term, however, we expect the success of the Tychowo wind farm to play a critical role in stimulating the development of the energy market in Poland.”

Jose Lozano, CFO of RP GLOBAL, said: “The project is strong evidence of what is possible even in extremely adverse market conditions in a joint and constructive effort of the parties involved. The EBRD and bcp Millennium, our main suppliers, the off-taker and our hard working team have made a big effort to make the closing possible. We sincerely hope that the example of the successful Tychowo financing will encourage other lenders and investors to go ahead with their projects and we expect to be able to successfully close our next upcoming wind and hydro projects in Poland and other markets later this year.”

The support of sustainable energy through financing and promoting the more efficient use of energy and alternative forms of power generation is one of the EBRD’s key goals. Since the adoption of its Sustainable Energy Initiative in 2006 the Bank has invested more than €2.7 billion in more than 160 projects.