Northland Power and its partner, Orlen, have inked a pivotal credit agreement for the Baltic Power offshore wind project in Poland. This agreement secures an equivalent of $5.2 billion in non-recourse green financing, aligning with Northland's green financing framework that spans the construction phase and a 20-year operational term.
The non-recourse project financing will be extended by a consortium of 25 international and local commercial banks, along with multiple export credit entities and multilateral agencies. The project is poised to reach financial close in the coming days, contingent upon the satisfaction of all pertinent conditions precedent to the financing.
Baltic Power has been co-developed by Northland and Orlen since Northland acquired a 49% equity stake in the project in 2021. The project financing amount of $5.2 billion represents 80% of Baltic Power's estimated total capital cost of $6.5 billion, which includes contingencies. The remaining capital will be contributed by the development partners at financial close and has already been secured.
Northland's share of equity for the project was fully secured through a green hybrid bond issuance in June 2023, in addition to existing corporate liquidity.
Mike Crawley, President, and Chief Executive of Northland, hailed this development as a significant achievement for Northland, its partners, and the Baltic Power project. He underscored the strong support received from the global financial community, highlighting their confidence in Northland's capability to develop, procure, construct, and finance large and complex offshore wind projects.
Pauline Alimchandani, Chief Financial Officer of Northland, noted that once operational, Baltic Power will become Northland's fourth offshore wind project in Europe. It is expected to provide substantial, high-quality, inflation-protected, long-term contracted Adjusted EBITDA and Free Cash Flow to the company and its shareholders.
Situated in the Baltic Sea, approximately 22km off the Polish coast near Plaża Wydmy Lubiatowskie, the Baltic Power project has already obtained all necessary environmental approvals and major construction permits. Construction activities have commenced, including the fabrication of critical components. Full commercial operations are anticipated to commence in the latter half of 2026.
