Orlen secures €800m EIB loan to modernise Poland’s electricity network as part of green transition

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Polish state energy giant Orlen has secured a loan of 3.5 billion zloty (€800 million) from the European Investment Bank (EIB) to modernise its electricity distribution networks as part of Poland’s transition to greener forms of energy.

The loan will help Orlen – through its subsidiary Energa Operator – to expand renewable energy connections and introduce smart grid technology, improving the security and efficiency of power supplies in northern and central Poland.

🇵🇱🇪🇺 We’re providing over €200m to @ORLEN_Group to upgrade power grid in northern and central Poland.

This #REPowerEU investment will boost renewable energy integration, supporting green transition and EU climate goals.

➡️https://t.co/eWWN0CKebI pic.twitter.com/kO2SiqYce0

— European Investment Bank (@EIB) November 12, 2024

“Achieving carbon neutrality requires both a shift in power generation and substantial improvements in operational efficiency,” Orlen CEO Ireneusz Fąfara said in a statement.

The loan, which the company says was offered on preferential terms compared to commercial banks, will be disbursed in tranches over three years, with a maximum repayment term of 15 years from the initial disbursement. The first tranche of the financing amounts to 900 million zloty (€207 million).

“The EIB’s commitment to energy transition investments in Poland remains strong,” said EIB Vice President Teresa Czerwińska. “As the EU’s climate bank, we support key investments in energy efficiency, renewable energy sources, and supply security. This loan to Orlen is set to advance these goals.”

As part of the project, Energa Operator, a leading electricity distributor across northern and central Poland, will focus on connecting new users in response to Poland’s rapid expansion in renewables.

In recent years, Poland has seen a large growth in micro-installations – small systems that produce renewable energy up to a capacity of 50kW, in large part set up by individual consumers. In 2023, Poland had over 1.4 million such micro-installations with an installed capacity of more than 11.3 GW.

However, the rapid development of micro-installations, which have become popular among Poles thanks to government subsidy programmes, has not been followed by the sufficient development of grid networks.

This regularly leads to situations where the power grid operator has to force renewable energy producers to reduce production to avoid overloading the system on days with lower demand.

Poland produced a record amount of wind power on 25 December, when it met 44% of national demand.

However, the grid struggled to cope, resulting in turbines having to be turned off and electricity transferred to Germany under an emergency procedure https://t.co/vYFlVyvxKE

— Notes from Poland 🇵🇱 (@notesfrompoland) December 28, 2023

“The rollout of distributed generation, demand-supply balancing, and energy storage are crucial challenges for Poland’s economy, and these upgrades to our network are essential to address these priorities while strengthening Poland’s energy security,” said Fąfara.

Energa Operator serves 3.4 million customers across northern and central Poland, while Orlen Group manages nearly 200,000 kilometres of power lines, covering approximately 24% of Poland’s territory.

Renewable energy installations connected to its grid have reached a capacity of about 9.2 GW, with 801 MW added this year by nearly 21,500 new installations by the end of the third quarter.

Renewable energy micro-installations contributed over twice as much power to Poland’s electricity network last year as in 2021.

The majority of that came from home solar installations, which have boomed thanks to a state subsidy schemehttps://t.co/1ZRcy65gyZ

— Notes from Poland 🇵🇱 (@notesfrompoland) March 21, 2023

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.