BGK grants Budimex a PLN 45 million loan to construct a wind farm

News date: January 27, 2023
BGK grants Budimex a PLN 45 million loan to construct a wind farm

Magnolia Energy, a Budimex special purpose vehicle set up to implement a wind farm construction project, comprising 2 turbines with a total capacity of up to 7 MW, has obtained financing from Bank Gospodarstwa Krajowego under the project finance formula. This is the next stage in the development of the Budimex Group’s investments in renewable energy sources.


On 26 January 2023 a loan agreement worth PLN 45.3 million was signed, which will be repaid by the project over the next 15 years by the company’s operations. The loan will allow financing of the construction and installation of two wind turbines and the construction of a power connection. The investment will be carried out in Wielkopolsce, near Gniezno.


The financing is based on a long-term power purchase agreement (PPA).


Budimex works with Bank Gospodarstwa Krajowego on a daily basis within our core business, and we are happy that we can extend this work 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 to look for utility-scale renewable projects. In early 2022 we acquired our first RTB (Ready-To-Build) onshore wind project called Magnolia in Wielkopolsce. By the end of 2022 we had expanded our portfolio with another project: a photovoltaic farm,’ says Adam Skwarski – Director of Investments and Development at Budimex and Member of the Magnolia Energy Management Board.


Budimex started investments in RES in 2022 – as one of the Budimex Group’s business diversification elements, alongside foreign markets and electromobility.


This year our main goal is to complete the construction of Magnolia (in the first half of this year) and to complete our second project – the photovoltaic farm – by the end of the year.


The organisation of this financing was carried out with the support of a law firm, Norton Rose Fulbright.


BGK supports the financing of RES


The wind energy financing falls within the Bank Gospodarstwa Krajowego strategy, developed for 2021-2025. One of its elements is to support the development of a low-carbon economy. The bank implements this measure by providing financing for investments in renewable energy sources. The energy generation on the basis of zero- and low-carbon sources is also one of the goals of the Strategic Security programme at BGK. The bank’s involvement in sustainability concerns has been recently recognised by Sustainable Fitch, which assigned BGK an ESG Entity rating of '2' (on a scale of 1-5, with '1' being the best rating).


‘The development of onshore wind energy means an acceleration of the Polish energy transformation and a number of benefits for the economy – GDP growth, additional revenue for local governments, and the development of supply chains or new jobs. The financing of such projects is part of the BGK mission to support the sustainable socio-economic development of Poland. Especially in the current geopolitical situation, increasing our country’s energy security through the construction of zero-carbon energy sources, including wind technology, is very important. Our role, as a Polish development bank, is to support the financing of Polish companies, due 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 of the entire national power system, or 36% if taking into account only renewable energy sources. Electricity generated by modern wind turbines has the lowest unit generation cost (LCOE).