Magnolia Energy, Budimex’s special purpose vehicle established to implement the project of building a wind farm consisting of 2 turbines with a total capacity of up to 7 MW, has obtained financing from Bank Gospodarstwa Krajowego in the project finance formula. This is the next stage in the development of the Budimex Group’s investments in renewable energy sources.
January 26, 2023 A loan agreement worth PLN 45.3 million was concluded, which will be repaid by the project in the next 15 years of the farm’s operation. The loan will enable the financing of the construction and installation of two wind turbines and the construction of a power connection. The investment will be built in Wielkopolska, near Gniezno.
The financing is based on a long-term power purchase agreement (PPA).
Budimex cooperates with Bank Gospodarstwa Krajowego on a daily basis in our core business and we are glad that we can extend this cooperation to the RES area– says Zbigniew Kamecki – Director of the Budimex Financial Management Office
In 2021, we decided to take advantage of our investment opportunities and look for renewable projects on a utility scale. At the beginning of 2022, we acquired the first RTB (Ready-To-Build) onshore wind project called Magnolia in Wielkopolska. By the end of 2022, we have expanded our portfolio with another project: a photovoltaic farm – says Adam Skwarski – Investment and Development Director at Budimex and at the same time Member of the Management Board of Magnolia Energy.
Budimex started investing in RES in 2022 – as one of the elements of diversification of the Budimex Group’s operations, alongside foreign markets and electromobility.
Our main goal this year is to complete the construction of Magnolia (in the first half of this year) and to complete the second project – a photovoltaic farm – by the end of the year.
The organization of this financing was carried out with the support of the Norton Rose Fulbright law firm.
BGK supports the financing of renewable energy sources
Financing wind energy is in line with the strategy of Bank Gospodarstwa Krajowego, developed for 2021-2025. One of its elements is to support the development of a low-carbon economy. The bank implements this activity m.in. by providing financing for investments in renewable energy sources. Energy generation based on zero- and low-emission sources is also one of the objectives of the Strategic Security programme at BGK. The bank’s commitment to sustainable development has recently been recognised by Sustainable Fitch, which awarded BGK a rating of “2” in its ESG rating (on a scale of 1-5, where “1” means the best).
“The development of onshore wind energy means an acceleration of the Polish energy transition and a number of benefits for the economy – GDP growth, additional revenues to local governments, development of supply chains and new jobs. Financing such projects is in line with BGK’s mission to support the sustainable, socio-economic development of Poland. Especially in the current geopolitical situation, increasing the energy security of our country by building zero-emission energy sources m.in. in wind technology, is very important. Our role, as a Polish development bank, is to support the financing of Polish companies, thanks to which the share of RES in our country’s energy mix will increase” – said Dariusz Szwed, Member of the Management Board of Bank Gospodarstwa Krajowego.
Last year, wind farms accounted for 13% of the total installed capacity in the entire national power system, while taking into account only renewable energy sources, it was 36%. Electricity generated by modern wind turbines has the lowest unit cost of generation (LCOE).
