No. 41/2023 | 19-09-2023 | 12:28
Signing of credit agreements for Offshore Wind Farm Project financing
ORLEN S.A. (“ORLEN”, “Company”) informs that today Baltic Power sp. z o.o. (“Baltic Power”) signed a credit agreements for the financing of the Offshore Wind Farm project located in the Polish Exclusive Economic Zone on the Baltic Sea with a maximum capacity up to 1200 MW (“Agreements”), (“Project”). The Agreements were signed with a consortium consisting of 25 Polish and foreign financial institutions (“Consortium”).
Pursuant to the Agreements, the Consortium will grant Baltic Power an investment loans in the total amount of EUR 3,6 bn for a period of 23 years. Moreover according to the Agreements Baltic Power will have a possibility to use additional and a standby loans in the amount of PLN 1 bn and EUR 0,6 bn respectively.
According to the Agreements, the repayment of the loan granted to Baltic Power will be based on future financial surpluses generated by the Project. The loan will be disbursed after fulfilment of the conditions precedent specified in the Agreements.
The Project is carried out by Baltic Power based on a joint venture agreement implemented by ORLEN, Baltic Power and NP BALTIC WIND B.V., a subsidiary of Northland Power Inc., based in Amsterdam, the Netherlands. ORLEN holds over 51% of the shares in Baltic Power.
The total Project budget is estimated at ca. EUR 4.73 bn and covers capital expenditures and contingency (in the amount of EUR 4.05 bn), as well as financing costs and additional reserve. Start of the Offshore Wind Farm construction is planned for 2023 and commercial operations are planned for 2026.
It is estimated that upon completion of the Project, in the first 5 years of Project operation, Baltic Power may generate additional free cash flow of ca. EUR 140 m annual average (with ORLEN share in the amount of 51%), and Baltic Power's EBITDA may reach ca. EUR 400 m annual average (with ORLEN share in the amount of 51%).
See also regulatory announcements: no 38/2023 dated 10 August 2023 and no 2/2021 dated 29 January 2021.