European export credit agencies (ECAs) and development banks have piled into a financing package of more than €6bn to develop two wind farms in the Baltic Sea.
The deal for the projects known as Bałtyk 2 and Bałtyk 3 is the largest energy project financing to date in Poland, according to Polenergia, which is developing the projects in a joint venture with Norwegian energy company Equinor.
The financing package, announced on May 23, includes coverage by ECAs in Germany and Poland, as well as funding from Sweden’s public export finance company SEK and development banks including the European Investment Bank, Poland’s BGK and the Nordic Investment Bank.
Almost 30 commercial lenders are also involved in the deal, according to a list published by Equinor.
Crédit Agricole is the commercial facility, security and intercreditor agent, while KfW Ipex-Bank is the agent for German ECA Euler Hermes and Santander the agent for Kuke, Poland’s ECA. PKO Bank is the letter of credit-issuing bank.
“Following strong interest from lenders, Bałtyk 2 and Bałtyk 3 have secured competitive terms and conditions,” Equinor says in a statement. “The final group, comprising of around 30 financial institutions, includes the most experienced in the sector along with many of Equinor’s core banks.”
Equinor and the German ECA did not respond when asked for further details of ECA involvement in the financing. A Kuke spokesperson says the agency provided a guarantee for €760mn of the financing.
A spokesperson for SEK declined to disclose the amount of the financing it is contributing but said its involvement is linked to exports from Hitachi, which is providing offshore and onshore grid transmission solutions for the wind farms.
The project includes installation of 100 fixed-bottom wind turbines, located up to 37 kilometres off the coast of Poland, as well as an operational and maintenance base in the Gdańsk region.
Once operational, the two projects will have a combined capacity of 1,440 megawatts, which Equinor says is enough to power 2 million homes in Poland. Full power production is expected by 2028.
“We appreciate the strong interest and support from lenders,” says Trine Borum Bojsen, Equinor’s senior vice-president for renewables in Europe. “This underpins the attractiveness of the projects and the confidence in Polenergia and Equinor as developers.”
A&O Shearman acted as legal advisor to the developers, while Clifford Chance advised the senior lenders. WTW acted as the senior lenders’ insurance advisor.
