Financing has closed for Baltic Power, Poland's first offshore wind farm, with a syndicate of lenders providing €4.4 billion (US$4.7 billion).

The 1,140-megawatt project is sponsored by Orlen Group of Poland and Northland Power of Canada. Located 23 kilometres off the coast, Baltic Power, equipped with 76 turbines, is scheduled to start generating electricity in 2026 to benefit over 1.5 million households.

The project loan – €3.6 billion of non-recourse term loan facilities and €800 million of ancillary facilities – features a large club of 25 commercial banks, international financial institutions, and export credit agencies. They include the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), as well as export credit agencies Export Development Canada (EDC), Export and Investment Fund of Denmark (EIFO), and Germany’s Euler Hermes.

Green Giraffe Advisory acted as a co-adviser with Pekao Investment Banking on the structuring and arrangement of the financing. In selecting the two advisers, the consortium has said they combine two vital features – an in-depth knowledge of the Polish market and a long track record of raising capital for offshore wind projects. Legal counsel was Hogan Lovells.

The EIB is lending €610 million, of which €350 million is backed by the InvestEU programme. EBRD is pitching in €140 million.

KfW IPEX-Bank said in a statement that it is one of the largest lenders to the project, and acted as mandated lead arranger. Euler Hermes is the facility agent.

Baltic Power is part of the first 5.9 gigawatts of offshore wind projects in Poland. It obtained a grid connection and a 25-year fixed contract for difference (CfD) offtake arrangement. The CfD offtake arrangement is euro-pegged and includes an inflation indexation mechanism.

Once operational, Baltic Power will be among the largest offshore wind projects globally, and will help Poland achieve its target of constructing up to 11GW of offshore wind energy projects by 2040.

PK Orlen is one of the largest conglomerates in Central Europe. Northland is an independent power producer listed on the Toronto Stock Exchange.