Polish electric utility Energa has secured €250m of financing from the European Investment Bank (EIB) for modernization and expansion of its electricity distribution network in northern and central Poland.
The financing is part of a larger €1bn committed by EIB during the Economic Forum in Krynica Zdrój to support the Polish economy by making strategic investments in science and energy.
EIB says that the financing will be done in the form of innovative hybrid bonds. Guaranteed under the European Fund for Strategic Investments (EFSI), the financing is a core element of the Investment Plan for Europe of the Juncker Commission.
EIB vice-president Vazil Hudák said: “Supporting competitive and secure energy is one of the EIB’s priorities, so we are glad to finance Energa’s modernisation programme, as it will improve the reliability and quality of electricity supply.
“The hybrid bonds under the Juncker Plan are again proving to be a successful means of innovative financing to boost investments in the energy sector in Poland.”
Energa intends to use the funds secured from the issue of hybrid bonds to execute its priority investment programme in the next two years.
The Polish electric utility said that its total capital expenditure in the 2017-19 period has been estimated to be around €814m.
According to Energa, the primary goal of its investment programme is to boost the security of electricity supply and at the same time bring down network losses and enhance the service quality.
Energa stated that the project will also have investments related to renewable energy sources, especially in low and medium voltage, to boost the hosting capacity of the electricity network.
Energa CEO Daniel Obajtek said: “The hybrid bonds’ issuance is the third project implemented in cooperation with the European Investment Bank.
“The funds raised will be allocated to investment in the distribution segment and to the expansion and modernisation of the power grid, including the strengthening of its reliability.
“This is a priority investment direction for us, which will allow us to provide high quality services to our customers”.
Additionally, the Polish electric utility plans to make investments in smart meters and network automatisation and also in new connections in the distribution network.
Image: EIB announced €1bn financing for Poland’s energy and science sectors. Photo: courtesy of ENERGA SA.