PL Offshore Wind

hold

IFC is considering two senior loans to support the development, construction, and operation of two offshore wind power projects (WPPs), MFW Baltyk II and MFW Baltyk III (the “Projects”). The projects are to be developed by MFW Baltyk II Sp. Z o.o and MFW Baltyk III Sp. Z o.o (collectively known as “the Borrower”), two special purpose vehicles (SPVs) established through a Joint Venture between Equinor Wind Power (https://www.equinor.com/) and Polenergia S.A. (https://www.polenergia.pl/en/) (the “Sponsors”). Each sponsor holds a 50% stake in the SPVs. Each of the two offshore WPPs will comprise 50 wind turbines (i.e., 100 in total), an offshore substation, and inter-array cabling and will have an installed capacity of 720MW (1.44GW in total). Both projects will be located within the Polish Economic Exclusive Zone (EEZ), with Baltyk II covering an area of 122 km2 located approximately 37 km offshore and Baltyk III covering 117 km2 located approximately 22 km offshore.  The WPPs are anticipated to be operational for 30 years.Two independent External Connection Infrastructure (ECI) systems will be constructed, one for each of the two projects, comprising 60 km and 67 km of offshore cable lines for MFW Baltyk II and III, respectively, and 14 km of parallel onshore underground cabling and an onshore substation, for each of the projects. The majority of the offshore ECI will be within the Polish EEZ, with the nearshore sections being in territorial waters and the onshore sections located within the municipalities of Utska and Redsiko in the Pomosrkie voivodship, Poland. Facilities are currently being developed at the port of Leba, approximately 100 km west of Gdansk, to serve as the operations and maintenance (O&M) base for the projects. The O&M facility will contain offices, limited warehousing and quay facilities for O&M support vessels. The development of the Leba facilities is not financed by the borrower and is, therefore, considered an associated facility. Additional temporary project infrastructure during construction will include offices and storage areas, site access roads, tracks, etc. Multiple Polish and European ports will provide the majority of support to the projects during construction. The Port of Rønne, on the Danish Island of Bornholm, will be used for turbine marshaling (including storage and pre-assembly). The projects will be developed and operated under a multi-contractor approach executed by international and Polish contractors. Early construction works commenced in Q3 2024, with full commercial operations expected in 2028. The projects are part of a larger program of offshore wind development within the Polish EEZ, aligned with the Polish Energy Policy, which provides for the construction of offshore WPPs with a total capacity of 5.9 Gigawatt (GW) by 2030 and approximately 11 GW by 2040. MFW Baltyk II and MFW Baltyk III are among the first WPPs to be built within the EEZ.  The locations of offshore renewable energy development were factored into the Maritime Spatial Plan (MSP) of the Polish Internal Sea Waters, Territorial Sea, and Exclusive Economic Zone (2019), which was developed pursuant of European Union Directive 2014/89/EU.  The main objective of the MSP is to promote sustainable development and to manage space and conflicts in marine areas taking into account economic, social and environmental aspects.A second national program of relevance is the 2021 Polish Offshore Wind Sector Deal (the ”Sector Deal”), which has been established as a permanent cooperation platform bringing together government, investors, institutions, and financial companies to (i) maximize local content in the supply chain, (ii) create employment opportunities, (iii) develop educational programs aimed at the sector, (iv) provide supporting infrastructure, (v) bring together stakeholders to manage cumulative impacts.