TAURON has received a loan of PLN 2.8 billion from the European Investment Bank (EIB). This is the largest corporate loan ever granted in Poland by the EIB for purposes other than the development of transport infrastructure. The entire loan will be used to cover investment expenditure in power distribution grids in the southern and south-western part of Poland.
The funds received from the EIB will go towards investments for connecting new customers (including micro-installations), developing smart metering systems and infrastructure, and modernising and expanding transformer stations to improve the quality of the energy supply. The investment objectives are to be completed by the end of 2026, and their performance is part of the programme for building smart distribution grids set out in the European Green Deal.
Investing in the distribution grid is needed to secure the transformation of the Polish energy sector. It is also key to continuing the decarbonisation process and achieving climate neutrality. In addition, the distribution grid is the basic platform for integrating renewable energy producers, prosumers and consumers, as power from renewable energy sources is mostly connected at the distribution stage.
“With a total of PLN 2.8 billion, or €624 million, this is the largest EIB loan granted to TAURON Polska Energia and one of the largest EIB loans ever awarded to a Polish company. The funds will help TAURON to modernise the power distribution grid and make it compatible with renewable energy sources, which will accelerate the pace of decarbonisation. The investment project will be located in southern Poland and help to achieve greater economic and social cohesion in the region. We are glad that we can support TAURON in its ambitious action for the economy and climate,” said EIB Vice-President Teresa Czerwińska, who is responsible for the EIB’s operations in Poland.
“A new loan agreement concluded with the European Investment Bank will positively affect the financial stability of the TAURON Group and allow the company to run priority investment projects in the area of distribution. It is also a clear signal for investors that TAURON is actively pressing ahead with its strategic plans, confirming that it can develop long-term cooperation with noted financial institutions to implement a strategy based on widespread distribution and our Green Turn initiative,” said Krzysztof Surma, Vice-President of the Management Board of TAURON Polska Energia for Finance.
Under the agreement, TAURON will be able to use the funds within three years from the signing date, and the maximum repayment period is 18 years.
TAURON and the EIB have been closely cooperating for over 10 years. In 2016 for example, a hybrid loan totalling €190 million was launched. It was an innovative instrument, marking the first issuance of EIB hybrid bonds in Europe, as well as the first issuance of hybrid bonds in Poland by an entity from outside the non-financial sector.
“Distribution is one of our investment priorities. We invest approximately PLN 2 billion in this segment annually. We are already a leader in the share of medium voltage cables (40%). With the loan granted by the European Investment Bank, TAURON is strengthening its leading position in the area of energy distribution, and even increasing the pace of grid development,” added Vice-President Surma.
As a key entity on the energy market, TAURON has been consistently meeting the objectives of its Green Turn initiative for nearly three years, which involves considerable expenditure on renewable energy. The Group plans to generate 1 400 MW of power from renewable energy sources by 2025.