EBRD, EIB and Pekao S.A. to co-finance the first large scale gas-fired power plant in Poland

The European Bank for Reconstruction and Development (EBRD) is supporting the modernisation of the Polish power sector with a long term senior loan of up to PLN 283 million (€69 million equivalent) for the construction of a new combined cycle gas turbine (CCGT) power plant in Stalowa Wola, a city of around 65.000 inhabitants in the South East of Poland.

The new plant will have a capacity of 449 MWe/240 MWt generated by the country’s first large scale gas fired power plant. The new facility will replace the old coal-fired power units at the Stalowa Wola plant and is expected to lead to a carbon emissions reduction by at least 950.000 tonnes of CO2 per annum.

The project company is owned, in equal shares, by Tauron Wytwarzanie S.A. and PGNiG Energia S.A., subsidiaries of the leading Polish power utility Tauron and the country’s biggest gas company PGNiG, respectively (together the Sponsors). The project is part of an ambitious Polish energy investment programme driven by the need to decommission and replace obsolete, inefficient and ecologically harmful power units from the 1950s and 1960s. The new gas-fired plant will meet all EU and local environmental standards.

The EBRD funding of PLN 566 million was equally divided into a loan of up to PLN 283 million (€69 million equivalent) to be taken on its own books. PLN 283 million was syndicated to Pekao S.A.. The European Investment Bank (EIB) will provide a parallel loan of up to PLN 566 million. The total project costs are estimated at around PLN 1.56 billion, with the remaining funding to be provided by the Sponsors.

Nandita Parshad, Director, Power and Energy Utilities said: “The Bank is proud to invest into the modernisation of Poland’s power sector with the aim of strengthening efficiency and lowering emissions. Replacement of old coal-fired generation units with a modern gas-fired unit allows an increase of combustion cycle efficiency, as well as significantly lowers CO2 and NOx emissions. In addition the project will reduce the Polish dependency on the coal-based power generation.”

The EBRD has been one of the most active investors in Poland in almost all sector of economy since 1991. To-date the Bank has invested EUR 6,046 million of its own funds in Poland for the total projects’ value of EUR 31,313. The energy sector is one of the Bank’s top priorities in Poland given the climate change challenges that the country is facing on its way to diversification of its energy mix and reduction of the CO2 emissions.

Author(s): Axel Reiserer
Source: www.ebrd.com