First “Green Loan” for an energy PPP in Poland
Meridiam, an infrastructure fund, has secured financing for a “Green Loan” for the construction of the Waste to Energy plant implemented out under a public-private partnership for the company Dobra Energia dla Olsztyna. The fully ecological plant was supported by long-term financing from the Polish Development Fund (PFR) and the European Investment Bank (EIB), together with a group of Polish and international banks. The PLN 490 million senior debt has been certified as a “Green Loan” under the LMA Green Loan Principles.
Meridiam, specialising in the development, financing and management of long-term projects in the public infrastructure sector, has fully secured the financing of the “Green Loan” for the construction and operation of the Waste to Energy plant, implemented out under the public-private partnership for the company Dobra Energia dla Olsztyna. The fully ecological plant, one of the most modern in Poland and Europe, was supported by long-term financing from the Polish Development Fund (PFR) and the European Investment Bank (EIB), together with a group of Polish and international banks. The senior debt of PLN 490 million was certified as a “Green Loan” according to the LMA Green Loan Principles.
The new investment in Olsztyn will make it possible to replace the current, outdated coal-fired installations with energy generated under a circular economy, which will supply both electricity and heat to the inhabitants of Olsztyn, thus reducing by up to half the amount of coal currently used to produce heat and at the same time significantly reducing emissions of harmful pollutants into the atmosphere, which is entirely in line with the climate policy of Poland and the entire European Union.
“Involving such a. number of key financial institutions in the process of financing a pro-environmental project such as the Waste to Energy plant implemented by Dobra Energia dla Olsztyna is another milestone for Poland on the way to energy transformation and achieving climate neutrality. We are proud to be involved in such an important project for Warmia and Mazury, one of the most beautiful and cleanest areas in Poland. ” – commented David Delgado Romero, Partner and Investment Director for Central and Eastern Europe at Meridiam, the asset management investment fund that made the project possible.
PFR is involved in financing the project, providing mezzanine financing of PLN 48 million to Dobra Energia dla Olsztyna. The European Investment Bank, meanwhile, will provide PLN 200 million of long-term senior debt for the project. The long-term financing, with a 20-year maturity, will be supplemented by commercial lenders – mBank, ERSTE Bank and Kommunal Kredit. Pekao Bank finances the VAT loan. Further banks may complete this pool in the coming weeks.
Since the start of construction in mid-2020, the project has been implemented using an EU grant managed by the National Environmental Protection Fund. The EU subsidy under the Infrastructure and Environment Operational Programme 2014-2020, Priority Axis II “Environmental protection, including adaptation to climate change”, Measure 2.2 Municipal waste management amounts to approximately PLN 172 million.
Meridiam – holding 95 per cent of shares in Dobra Energia dla Olsztyna and the Spanish company Urbaser – an entity providing services to local governments in the waste management and processing sector – will provide equity to compelment the financing of the Olsztyn investment. The total financing plan for the project amounts to around PLN 957 million. The new financing plan has been approved by the public partner, Miejskie Przedsiębiorstwo Energetyki Cieplnej (MPEC) in Olsztyn. The senior debt has been rated by Vigeo Eiris Group (Moody’s) as compliant with the Loan Market Association’s Green Loan Principles.
“Our investment is a project of strategic importance for the capital of Warmia and Mazury. According to the investment assumptions, the new installation will make it possible to recover energy from more than 100,000 tonnes of alternative fuel (RDF) per year and ensure continuity of heat supply to residents. In terms of the production of green energy, the project will benefit the city by reducing CO2 emissions associated with the production of heat by approximately 150 thousand tonnes per year. – Krzysztof Witkowski, President of Dobra Energia dla Olsztyna, points out and adds: “It is worth emphasising that the fuel which will be used to power the eco-power plant is produced from waste generated by the residents themselves, which is in line with a closed-circuit economy. ”
The launch of the installation for thermal processing of waste from the Warmińsko-Mazurskie Voivodeship with the recovery of electricity and heat in a Waste to Energy plant is scheduled for mid-2023. The cogeneration plant, which produces combined heat and power, will cover around 30% of the city’s heat demand.
- Adam Kukielewski, Point of View || email@example.com, 600 990 902