EIB Backs Polish Energy Transition with $220 Million Loan to Orlen

Poland’s largest energy company Orlen Group has secured a PLN 900 million ($220 million) loan from the European Investment Bank (EIB) for energy transition projects. The loan is the first financial injection following EIB's approval of PLN 3.5 billion ($854.6 million) in financing to boost the network of Orlen's Energa in 2024 and 2025.

According to a media statement by the EIB, the funds will be used to invest in strengthening and expanding the power grid of Energa, a distribution system operator owned by Orlen. The plan is to modernize electricity distribution in northern and central Poland, allowing the connection of more renewable energy sources (RES). Energa’s plan, supported by EU funding, entails adding new customers and increasing RES connection capacity by 4.8 gigawatts. The distribution system operator aims to improve the security and efficiency of power supply.

“This new transaction reaffirms the EIB’s role as a trusted partner of multidimensional energy transition in Poland”, said EIB Vice-President Teresa Czerwińska. “As the climate bank of the European Union, the EIB supports strategic investments in energy efficiency, renewable energy sources, as well as stability and security of supply. We expect this seventh EIB financing agreement with ORLEN to further these objectives”.

“Achieving carbon neutrality requires not only a shift in generation sources but also significant improvements in operational efficiency. The rollout of distributed generation, demand-supply balancing, and energy storage represent crucial challenges for Poland’s economy”, Ireneusz Fąfara, President of the Management Board and CEO of Orlen, said. “Effective energy management can provide a substantial competitive edge for both the Polish and broader European economies. Hence, large-scale investment programs to upgrade our network are vital. The financing provided by the European Investment Bank will allow us to address these priorities while strengthening Poland’s energy security”.

The agreement between the EIB and Orlen was formed within the framework of the REPowerEU initiative. Last year, EIB financing in Poland under this initiative amounted to EUR 1.78 billion (approximately $1.88 billion), marking an 80 percent rise compared to 2022. As part of the agreement with Orlen Group, EIB funds will be allocated in stages over three years from the date of execution, with repayment scheduled over up to 15 years following the first disbursement, the EIB said.

"Utilizing a funding source dedicated to the energy transition will not only enable us to execute our planned investments but will also strengthen the Group’s financial security thanks to the long-term availability of these funds at a competitive cost", said Magdalena Bartoś, Vice President of the Management Board, Finance, of Orlen.

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