Equinor says Bałtyk 2 and 3 project financing secured

Partners Equinor (50%) and Polenergia (50%) have reached financial close for the Bałtyk 2 and Bałtyk 3 projects. 

The two project financing packages, which are more than EUR 3 billion (US$3.4 billion) for Bałtyk 2 and over EUR 3 billion for Bałtyk 3 including ancillary facilities, have been secured. Final investment decisions for Bałtyk 2 and Bałtyk 3 were taken by the project joint venture partners on May 19.

The offshore wind projects were awarded contracts for difference (CfD) in 2021, securing power prices at about EUR 71 (US$80.6) per MWh (2021 price) for 25 years, with inflation indexation. The wind farms are project financed with gearing of about 80%. The projects support Equinor’s expected double-digit nominal equity rate of return for renewables and low-carbon investments.

Equinor is responsible for the construction phase and will be the operator of the two offshore wind farms.

Onshore construction work is ongoing, fabrication of key components has started, and marine operations will start next year.

Total power capacity of the projects is 1,440 MW, enough to power 2 million Polish homes. Full commercial power production is expected in 2028.

The individual project finance packages will fund the capital investment and the other expenses of each of the projects during the construction process totaling about EUR 7.2 billion.

Danske Commodities, an Equinor subsidiary, will provide route-to-market services including balancing and power offtake for the first three years of operations.

Following strong interest from lenders, Bałtyk 2 and Bałtyk 3 have secured competitive terms and conditions. The final group, comprising about 30 financial institutions, includes the most experienced in the sector along with many of Equinor’s core banks, the Nordic Investment Bank and the European Investment Bank.