Decision for PGE power's OWF investment project Baltica 2 soon

"We are on the eve of the investment decision, we are trying to close its financing. It's a very big project, it's a bit more complicated in terms of structure than Orlen's OWF, but we are managing to attract very strong interest from the financial sector," PGE's deputy CEO Maciej Gorski said.

"We are talking about weeks until the investment decision, so we are also counting the time to close the financing in weeks," he added.

PGE will be looking to finance its part of the investment under the project finance formula.

"This is the first such project finance in PGE. We will want to consider this direction as a way of financing other investments within the group," said the deputy CEO.

Baltica 2 is an offshore wind farm project with a capacity of approximately 1.5 GW being developed by PGE together with Ørsted.

As Gorski informed, the project will cost a total of around PLN 30 billion (EUR 6.96 mln).

Baltica 2 will want to participate in the auction in 2025.

"We are preparing to participate in this auction," PGE's deputy CEO said.

"We hope that the set benchmark of PLN 512/MWh will be maintained for less demanding projects, but we believe that projects that have a longer connection, in particular offshore, sometimes onshore and are on more demanding land require a higher price," he added.

He noted that the prices of the main components of offshore wind farms are now significantly higher than 2-3 years ago.

"Today we are talking about a 20-30 percent higher CAPEX," Gorski said.

The deputy CEO said that PGE would like to pursue the Zarnowiec electricity storage project, but after the contractors' bids turned out to be above the estimated contract value, additional profitability analyses are needed.

This would be the largest electricity storage facility in Poland and the expenditure is estimated at PLN 1.2-1.3 billion (EUR 278.5-301.8 mln).

Asked whether the group would be publishing a strategy update despite the lack of a decision on the company's coal assets spin-off, Gorski said: "There is a discussion in the public domain about the spin-off of coal assets. We are waiting for decisions at the political level."

"Understanding the level of complexity of the matter, as the management board of PGE we are taking action with regard to individual business lines," Gorski added.

The deputy CEO said that PGE is operating in a very volatile market.

"We don't have the comfort of waiting for decisions on new investments until we have made a formal decision to update or not to update our strategy," the deputy CEO added.

The company maintains that financial institutions and insurers are limited in their willingness to fund a group with coal sources and mines.

"In our case, the challenges related to coal assets are the biggest - we have hard coal and lignite," said deputy CEO Przemyslaw Jastrzebski.

pel/ han/ ao/