- EIB and ORLEN sign second PLN 900 million loan this year for power network upgrades by subsidiary Energa.
- Agreement brings EIB financing for Energa grid to PLN 1.8 billion (ca. €423 mln) in 2024, out of a total of PLN 3.5 billion authorised for 2024-2025.
- Energa will build new power lines, add more households and renewable energy sources.
European Investment Bank (EIB) and ORLEN Group, Poland’s largest energy company, signed a second PLN 900 million loan agreement this year to finance projects supporting energy transition in the country. Totalling PLN 1.8 billion, EIB funding will be used to strengthen and expand power distribution network of system operator Energa, which is majority owned by ORLEN.
“The EIB is doubling its financing to ORLEN Group this year because upgrades and expansion of Poland’s power distribution network are key aspects of energy transition in Poland,” said EIB Vice-President Teresa Czerwińska. “As the EU’s climate and development bank, the EIB has so far contracted some PLN 1.8 billion for that purpose out of more than PLN 3.5 billion envisaged for ORLEN’s subsidiary Energa. This will drive grid expansion to add new customers, as well as upgrades to increase RES connection capacity. Planned investments will also increase supply security by improving the grid’s resilience to extreme weather events such as gale-force winds or heavy downpours that are aggravated by climate change. Through this partnership with ORLEN Group, EIB financing will work towards these strategic goals for Poland’s safety and sustainable development.”
EIB funding to Energa will support adding some 830 kilometres of power lines and 320 kilometres of new connections to reach some 25,000 new customers. The company also plans to instal 170,000 new smart meters and 1,000 electric vehicle charging stations, as well as raising RES connection capacity by 1.4 GW, paving the way to bringing clean energy to around 900,000 new households.
“ORLEN Group’s energy transition depends heavily on our ability to secure cost-effective financing for investment projects. Through our partnership with the European Investment Bank, we have access to the necessary funding on highly favourable terms, significantly better than those offered by commercial lenders. Cost optimisation for our growth programmes is a priority, and directly supports the creation of shareholder value”, said Magdalena Bartoś, CFO and Vice President of ORLEN Management Board.
Agreement between EIB and ORLEN Group was concluded under REPowerEU, an EU programme aimed at increasing strategic autonomy of the bloc by diversifying energy supply and accelerating green transition. By 2027, EIB will provide €45 billion to advance REPowerEU goals. In Poland, EIB financing under REPowerEU reached €1.78 billion last year, an 80% increase from 2022.
ORLEN Group has allocated over PLN 8.3 billion for investments in electricity distribution over the past five years. Renewable energy capacity of Energa’s network currently amounts to around 9.2 GW. This year, the company connected nearly 21 500 new renewable energy installations (including small prosumer installations) by the fourth quarter with total capacity of 801 MW.
Background information
The EIB is the EU institution providing long-term financing for sound projects that pursue EU priorities. The EIB’s owner and shareholders are the 27 Member States. The bank’s financing and advisory services support economic competitiveness, spur innovation, promote sustainable development, enhance social and territorial cohesion, and support a swift and fair transition to climate neutrality.
In 2023, the EIB Group granted a total of €88 billion in new financing to more than 900 projects, of which €49 billion was earmarked for green investments. These funds are expected to support total investment of €320 billion, help 400 000 companies and sustain 5.4 million jobs. The EIB Group is on track to meet its goal of mobilising €1 trillion of climate investment by the end of this decade.
More than half of the €5.1 billion granted to Poland by the EIB Group in 2023 went to climate-friendly projects.
ORLEN Group is an integrated multi-utility energy company listed in the prestigious global Fortune Global 500. It was the first company in the region to declare achieving total emission neutrality in 2050. Thanks to the recent acquisitions and mergers, it became one of the 150 largest companies in the world. The company operates on 10 home markets: Poland, Czech Republic, Germany, Lithuania, Slovakia, Hungary, Austria, Canada, Norway and Pakistan. Retail sales are carried out using the largest network of 3,500 fuel stations in the region. The ORLEN Group's offer reaches over 100 countries on 6 continents.
By the end of this decade, ORLEN will have invested over PLN 320 billion to implement strategic projects, of which approximately 40% will be allocated to green investments, including wind energy at sea and on land, photovoltaics, biogas and biomethane, biofuels, electromobility, green hydrogen and synthetic fuels.