PGE RAILWAY ELECTRICITY DISTRIBUTION

Promoter – Financial Intermediary

PGE ENERGETYKA KOLEJOWA SA

Location

• Poland

Description

The project aims to build and modernise train power stations and control rooms. This includes creating power lines and the needed infrastructure to provide electricity for the railway network in Poland.

Additionality and Impact

The operation is an investment programme of modernization of power supply systems for railway network throughout Poland on sections of railway lines modernized by PKP PLK (MUZA program). The project consists of construction of new and modernization of substations together with the accompanying infrastructure, including power supply lines to substations, power supply cables, return cables and disconnector control cables the existing elements of the railway traction network power supply systems. Majority of the programme schemes are located in less developed regions.

The new and modernised substations will supply the rail operators with energy for electric trains on modernised lines in order to increase the speed and number of electric trains on the line.

The Project is expected to increase the quality of rail services provided in Poland as well as promote travel by rail and should, thereby, enhance sustainable transport in line with EU objectives. 

The Promoter appreciates the terms provided by the EIB. The long tenor of the EIB loan (18) is well in line with the economic life of the underlying electricity distribution assets and it is perfectly suited to finance investments with long payback period such as the Project implemented by PGE. The funding of similar maturities is not available on the Polish bond and loan market. Customised terms such as flexible drawdown over the long availability period are of value to the Promoter because of the multiannual Project's implementation period. The EIB involvement will send a strong signalling effect to the commercial banks operating in Poland and other stakeholders that EIB is standing by to support the decarbonisation of the Polish economy and transportation.

Objectives

The project is expected to provide the power for electrified lines and to increase the capacity (additional power) and reliability of the rail traction energy supply installations. Indirectly the project is expected to increase the quality of rail services provided in Poland as well as promote travel by rail and should, thereby, enhance sustainable transport in line with EU objectives. The project will be located in Poland, the majority of investments in less developed regions, with the exception of investments in the Warszawski stoleczny region, and is, therefore, eligible under Article 309 of the Treaty on the Functioning of the European Union (TFEU), point (a) projects for developing less-developed regions. Investments are located along the railway lines throughout Poland which in most cases form part of a comprehensive or core TEN-T railway network.

Sector(s)

• Transport - Transportation and storage

Proposed EIB finance (Approximate amount)

PLN 1000 million (EUR 232 million)

Total cost (Approximate amount)

PLN 2103 million (EUR 487 million)

Environmental aspects

The investment programme comprises several schemes with voltage up to 110 kV. Some of these schemes may fall under Annex II of the EIA Directive 2011/92/EU, as amended by Directive 2014/52/EU, which requires the competent national authority to determine the need for an EIA. The environmental and social due diligence will focus on the Promoter's conformity to implement the programme in line with the EIB environmental and social standards and requirements. The Project's potential impacts on protected areas and species, in accordance with the Habitats Directive (92/43/EEC) and Birds Directive (2009/147/EC), are to be appraised further. Furthermore, the adaptation of the Project to the climate change and the project's effect on GHG emissions will be assessed.

Procurement

The Promoter is a DSO operating in Poland and, therefore, procurement for the implementation of the programme has to be carried out in accordance with the relevant applicable national public procurement legislation, in line with Directive 2014/25/EU (Utilities Directive).

Status

Signed - 29/07/2024