Northland, Orlen Secure CAD 5.2 Billion for 1.1 GW Polish Offshore Wind Farm

September 19, 2023, by Adnan Memija

Northland Power and its partner Orlen have signed a credit agreement for the 1.1 GW Baltic Power offshore wind project in Poland.

The agreement secures an equivalent of CAD 5.2 billion (approximately EUR 3.6 billion) of non-recourse green financing that adheres to Northland’s green financing framework covering construction and a 20-year term.

The financing represents 80 per cent of Baltic Power’s CAD 6.5 billion projected total capital cost (inclusive of contingencies), said Northland Power.

The non-recourse project financing will be provided by 25 international and local commercial banks, and multiple export credit players, and multi-lateral agencies.

The remaining capital will be contributed by the development partners at financial close and has already been secured, Northland Power said.

“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,” said Mike Crawley, Northland President and Chief Executive.

Northland has been co-developing Baltic Power with Orlen since acquiring a 49 per cent equity stake in the site in 2021.

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The project is located in the Baltic Sea, approximately 22 kilometres off the Polish coast near Plaża Wydmy Lubiatowskie.

Major construction permits and all environmental approvals have been obtained and construction activities have commenced, with the fabrication of certain key components underway, said Northland Power.

The developer also added that the financial close is expected to follow in the coming days.

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“Once operational, Baltic Power will be Northland’s fourth offshore wind project in Europe and will provide significant high quality, inflation-protected, long-term contracted Adjusted EBITDA and Free Cash Flow to our business and shareholders,” said Pauline Alimchandani, Northland’s Chief Financial Officer.

The Baltic Power offshore wind farm is scheduled to enter commercial operations in 2026 when it will supply more than 1.5 million Polish households with renewable energy annually for over 25 years.