NORTHERN POLAND ELECTRICITY GRID - REPOWEREU

The project consists in an investment programme of Energa SA electricity distribution network in Poland over the period 2023-2025. The programme includes investments in network rehabilitation and expansion, and metering.

The aim is to increase the distribution network capacity, maintain or increase its reliability, safety and security, renew existing assets and planned development (including renewable energy sources) as well as deploy smart technologies.

The Programme supports the modernization, reinforcement and digitalisation of the electricity distribution network infrastructure in northern and central Poland, consistently with the country's National Energy and Climate Plan and in alignment with EIB policies. All of the programme schemes are located in Cohesion Priority Regions. The programme is expected to deliver economic benefits over the financial return, in particular by addressing market failures linked to negative environmental externalities (reducing GHG emissions from power generation by connecting renewables and, indirectly, from mobility) and the supply of public goods (security of power supply) and has positive ESG impacts.

The Programme contributes to Bank's lending priority objectives on Climate Action and Environmental Sustainability and it aligns with the REPowerEU objectives. The financing of the programme will contribute to the Bank's ELP themes on Securing the Enabling Infrastructure (energy networks) and Innovative technologies and new types of energy infrastructure (smart meters).

In line with the EU Taxonomy, electricity grid infrastructure in Europe is considered eligible for classification as an activity contributing to climate change mitigation.

The project is expected to deliver good economic benefits and good broader social benefits. The promoter is experienced in works of this nature and has a sound project management system in place.

The Promoter appreciates the financial value added 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 (>25 years) and it is perfectly suited to finance investments with long payback period such as the Project implemented by ORLEN. The funding of similar maturities is not available on the Polish bond or 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 should have a crowding-in effect and send a strong signalling effect to commercial banks operating in Poland, EBRD and other stakeholders that EIB is standing by to support the decarbonisation of the Polish energy sector.

Some programme schemes may fall under Annex II of Directive 2014/52/EU, amending the Environmental Impact Assessment (EIA) Directive 2011/92/EU thus requiring a review by the competent authorities at the planning/consent stage with due regard to the necessity for environmental and biodiversity impact and appropriate assessments.

The promoter has to ensure that contracts for implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation, 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.