PROJECT NEPTUNE - OFFSHORE WIND FARMS POLAND

The project includes the design, implementation and operation of 2 (two) very large-scale, fixed-bottom offshore windfarms (Baltica 2, Baltica 3) with a total capacity of up to 2.5 GW. Baltica 2 (1.5 GW) and Baltica 3 (1 GW) are both located in the Baltic Sea, inside the the Polish Economic Exclusive Zone.

The offshore wind farms will primarily reduce carbon and air pollution emissions, which are externalities the market fails to address. Moreover, the project should foster the integration of new, variable renewable generation technologies in the market. The proposed EIB loan would thus fill a market gap in the development of new renewable capacity. That would include a financing gap for projects that try to develop new capacity with more market-exposed structures and instruments.

The project concerns the development and operation of a new, very large-scale, fixed-bottom offshore wind farms that will contribute to the achievement of the 2030 decarbonisation targets set out in the National Energy and Climate Plan (NECP), the Polish State National Energy Policy (PEP2040), which has revised these targets upward, as well as the the REPowerEU action plan.

The project is located in an EU Less Developed region; categorised internally as an EIB Priority Cohesion region (Pomorskie). The financing of this project would contribute to the Bank's lending priority objectives of Renewable Energy, on Climate Action, Environmental Sustainability as well as Economic and Social Cohesion.

The offshore wind farms will primarily reduce carbon and air pollution emissions, which are externalities the market fails to address. Moreover, the project provides new generation capacity in a sector characterised by incomplete markets, relying on public Contracts for Difference with exposure to residual market risks. It thereby contributes to the policy objective of supporting market integration of renewable energy projects.

The project is economically justified, yet it is merely financially viable (due to the high investment cost).

EIB will play a critical role given the difficulty to raise large amount with long tenor from the capital market (very rarely exceeding 20 years), it is expected that EIB financial value will be important by providing a sizeable amount with a long tenor. The Bank's support to the project will support the crowding in of other financiers given its experience the sector. EIB would not be able to provide such type of financing, or not at the same quantum, without the support of InvestEU.

Wind farms adhere to the national legislation having transposed Annex II of Directive 2014/52/EU amending Directive 2011/92/EU, thereby leaving it to the competent authority to determine if an Environmental Impact Assessment (EIA) is mandated. Given the project size, the competent authority required an EIA to be conducted. Compliance of the authorisation process with relevant EU Directives will be verified during appraisal.

It is provisionally understood that the promoter, which are a Special Purpose Vehicles (SPV), are neither - in the sense of the EU procurement policies - a contracting authority nor a public undertaking. It also does not see to operate on the basis of special or exclusive rights granted by a competent authority in relation to this project. Consequently, no public procurement would be required. However and as indicated by the promoter, the SPVs, when tendering and awarding contracts, take the rules of the EU procurement directives as guiding principles. The impact of this approach to the project needs to be assessed during appraisal.