Project Highlights

• Baltic Power is a 1.1 gigawatt (GW) offshore wind project being developed as a joint venture between Northland Power (49 per cent) and Orlen S.A. (51 per cent).
• The project is Northland’s fourth in Europe within its growing offshore wind portfolio, with long tenor and high credit quality offtake agreements.
• Baltic Power will nearly double the company’s gross installed offshore wind capacity from 1.2 GW to 2.3 GW. Once operational, the project is expected to power over 1.5 million Polish households and will be a significant contributor to supporting Poland’s energy transition targets.
• Baltic Power benefits from a 25-year Euro-pegged and inflation-indexed Contract for Difference (“CfD”) revenue arrangement with the Government of Poland.
• The project’s total capital cost is projected to be approximately $6.5 billion and the project is expected to provide strong Free Cash Flow and Adjusted EBITDA upon achieving full commercial operations in 2026.
• The project has secured all environmental approvals, major permits and key construction contracts.
• Northland has secured all necessary equity funding required for the project. Financial close is expected to follow in the coming days, upon satisfaction of all relevant conditions precedent to the financing being achieved.

Northland Power Inc., along with its partner, Orlen S.A., have announced that its Baltic Power offshore wind project in Poland has signed a credit agreement to secure an equivalent of $5.2 billion of non-recourse green financing that adheres to Northland’s green financing framework covering construction and a 20-year term.

The non-recourse project financing will be provided by 25 international and local commercial banks, and multiple Export Credit Agencies and multi-lateral agencies. The project is expected to reach financial close in the coming days, upon satisfaction of all relevant conditions precedent to the financing being achieved.

“Today’s announcement is a major achievement for Northland, our partners and the Baltic Power project,” said Mike Crawley, President and Chief Executive Officer of Northland. “This milestone demonstrates the support from the global financial community and reflects their confidence in Northland and our ability to develop, procure, construct and finance large and complex offshore wind projects. Despite the recent challenges for the offshore wind sector in some markets, Northland continues to find a way to advance large-scale offshore wind projects with attractive economics.”

“This financing is Northland’s first offshore wind project in Poland,” said Pauline Alimchandani, Northland’s Chief Financial Officer. “We would like to thank all stakeholders for working together to achieve this significant milestone. Once operational, Baltic Power will be Northland’s fourth offshore wind project in Europe and will provide significant high quality, inflation-protected, long-term contracted Adjusted EBITDA and Free Cash Flow to our business and shareholders.”

Northland has been co-developing Baltic Power with Orlen, since acquiring a 49 per cent equity stake in the project in 2021. The project financing amount of $5.2 billion represents 80 per cent of Baltic Power’s $6.5 billion projected total capital cost (inclusive of contingencies). The remaining capital will be contributed by the project partners at financial close and has already been secured. Northland’s share of equity for the project was fully secured through the green hybrid bond issuance in June 2023 and existing corporate liquidity. Northland’s interest in Baltic Power is expected to generate a five-year average Adjusted EBITDA (a non-IFRS measure)1 of approximately $300 to $320 million and $95 to $105 million of Free Cash Flow (a non-IFRS measure)1 per year once operational, delivering significant long-term cash flow for the Company’s shareholders.

The project’s 25-year CfD offtake agreement is Euro-pegged and includes an inflation indexation feature commencing with a base year of 2021, providing offsetting benefits to the higher inflationary price pressures recently experienced. Further optimization opportunities will be pursued during and after the construction period, which include: future optimizations the long tenor CfD offers, operating cost improvements and construction execution efficiencies. The project has secured a 15-year operations and maintenance agreement with the turbine supplier, with options to extend.

The project is located in the Baltic Sea, approximately 22 kilometres off the Polish coast near Plaża Wydmy Lubiatowskie and has obtained all environmental approvals and major construction permits. Construction activities have commenced, with fabrication of certain key components underway. Full commercial operations are expected in the latter half of 2026. Once operational, Baltic Power will be amongst the largest offshore wind projects globally. It is expected to provide clean energy to over 1.5 million Polish households and will play an important role in helping Poland achieve its renewable energy targets where installed capacity of offshore wind energy is expected to reach up to 11 GW by 2040.

KeyFacts Energy: ORLEN Poland country profile