Providing clean energy to more than 1.5 million households in Poland
Upon its completion in 2026, the Baltic Power wind farm will start producing electricity to power over 1.5 million households.
Poland is facing a huge transition, which in the next 20 years will result in a new electricity system, transformation of heat and transport sectors. By 2040, a large amount of coal-fired capacity will be withdrawn from the national energy system. Renewable energy is due to play a key role in modernizing the energy system. As Poland has a clear roadmap for its transition to a more sustainable economy, the development of offshore wind projects is a cornerstone in this transition. Offshore wind farms will be key to transforming Poland’s electricity system and strengthening the region’s energy security.
The Orlen Group and Canada’s Northland Power are constructing their first offshore wind farm through Baltic Power.
Baltic Power is the first offshore wind project in Poland and its construction is the most advanced under the first stage of offshore wind developments in Poland covering 5.9 GW across 8 projects. The farm will be located approximately 23 kilometres off the coastline near Łeba and Choczewo. It is designed to comprise 76 state-of-the-art wind turbines, each with a unit capacity of 15 MW.
The project has successfully secured contracts for all key components, including turbines, offshore and onshore substations, cables, and foundations, and their respective manufacturing, transport, and installation. It also holds construction permits for the onshore part of the project and a permit for the construction of an offshore power connection to facilitate the transmission of electricity from the offshore wind farm to the mainland. Upon its completion in 2026, the Baltic Power wind farm will start producing electricity to power over 1.5 million households.
The Orlen Group and Northland Power have entered into credit facility agreements to finance their joint Baltic Power project. The agreements have been signed with a syndicate comprising 25 Polish and international financial institutions, marking one of the key stages in the project preparation process. Societe Generale has acted as Mandated Lead Arranger, Lender and Hedge Provider on this transaction. This landmark transaction is part of Societe Generale’s strategy to support its clients in the energy transition, with dedicated solutions and a commitment to contribute to sustainable finance of EUR 300 billion by 2025.
We are in the final stages of preparing a large-scale project that will significantly change Poland’s energy mix. Our robust financial footing and extensive international experience in managing large-scale projects equip us to handle this process effectively. Despite the highly dynamic environment, we are on track with the Baltic Power project’s preparation, with the goal of providing clean energy to more than 1.5 million households as early as 2026. Securing financing for the project demonstrates that the financial markets also have a positive view of ORLEN’s strategic investments through 2030.
Today’s announcement is a major achievement for Northland, our partners and the Baltic Power project. This milestone demonstrates the support from the global financial community and reflects their confidence in Northland and our ability to develop, procure, construct and finance large and complex offshore wind projects. Despite the recent challenges for the offshore wind sector in some markets, Northland continues to find a way to advance large-scale offshore wind projects with attractive economics.
The overall project budget is estimated at about EUR 4.73bn and includes capital expenditures with insurance of approximately EUR 4.05bn, as well as financing costs and an additional reserve. The construction of the farm is slated to commence in 2023, with the offshore segment following in 2024, and the project is expected to become operational in 2026. During the initial five years of operation, the Baltic Power project could generate an additional average annual free cash flow of approximately EUR 140m.
Societe Generale is particularly honored to participate in the financing of this major project for Orlen Group and Northland Power and more globally for Poland. Baltic Power will be the first offshore wind farm in the country and will definitely pave the way for the energy transition plan initiated by Poland. With 4 TWh of green electricity produced, this project also echoes Societe Generale’s recent strategic plan to play a leading role in the energy, environmental and social transition.