The European Investment Bank (EIB) has provided two loans totalling almost PLN 2 billion (some EUR 475m) to PGE Group for electricity network modernisation and the construction of two cogeneration units in gas-fired, combined heat and power plants. The new units are located within the boundaries of the existing plants in Gorzów and Rzeszów and are reducing the current activity of coal-fired installations.

An EIB loan of PLN 1.5 billion has been earmarked for the extension and modernisation of PGE’s electricity distribution networks in Central and Eastern Poland. Besides the modernisation works, new overhead lines, cables, transformers and meters have been installed. This investment has enabled PGE to cater for demand growth, reduce losses and connect new end-users and also renewable generators, improving the reliability and quality of the electricity supply.

The EIB is lending a further PLN 490 million to finance the construction of cogeneration units in Gorzów and Rzeszów. Due to the deployment of modern gas-fired technologies the new units are producing electricity and heat in a highly efficient manner and with a much lower environmental impact, including reduced CO2 emissions with an average level of around 275g CO2/kWhe.

László Baranyay, EIB Vice-President with responsibility for the Bank’s operations in Poland, said: “The EIB, as the bank of the European Union, strongly promotes a competitive, diversified and secure energy supply. We therefore particularly welcome this agreement with PGE, as its investment is improving the reliability of the electricity supply in Poland and reducing interruptions in distribution.  Thanks to the use of gas, PGE’s undertaking is also increasing the diversification of the Polish power sector, which is dominated by coal-fired plants. These loans confirm the EIB’s commitment to continue supporting the Polish energy groups and other stakeholders in their strategy of modernising the Polish energy sector, which is necessary for the successful economic development of the country”.

Marek Woszczyk, CEO of PGE said, “The EIB loan represents additional large-scale financing recently obtained, which further proves that the PGE Group is seen as a stable partner not only by financial institutions operating in the Polish market but also in the wider European arena. The scale of PGE’s investment projects developed to date is impressive and the investments executed thanks to the funds obtained will enable us to strengthen our leading position in the market and increase the value of the Group”. 

These are the first loan agreements concluded between the EIB and PGE. They will establish the EU’s long-term lending institution as a funding partner of the largest energy group in Poland, PGE, in support of the PGE Group’s investment and funding strategies as a source of finance at an attractive all-in cost and with long maturities, not always available in the domestic market.