The European Investment Bank (EIB) granted €525 million to Poland's top utility PGE Polska Grupa Energetyczna (PGE) to support renewable energy production. The favourable loan will allow PGE to develop its network of photovoltaic installations throughout the country and to modernise an existing pumped-storage power plant.
The seventh agreement between the EIB and PGE will support the firm's decarbonisation strategy by enabling planned investments in photovoltaic installations with a shared production capacity of nearly 730 MW, and the upgrade of a pumped-storage power plant (540 MW) in southern Poland. Provided under REPowerEU, the funding will support energy transition, as well as climate and environmental action in Poland, in line with the EIB's role as the climate bank of the EU.
“Developing green energy is a key part of energy transition, and a precondition for security and economic competitiveness. This agreement between the EIB and PGE will increase the available renewable energy capacity, supporting strategic development needs of Poland and the European Union as a whole,” said EIB Vice-President Teresa Czerwińska. “Providing financing for climate projects and energy transition is one of the EIB's top priorities. Last year, we invested €2.5 billion in this area in Poland alone, including €850 million in power grid projects. This year, we have already provided a leading contribution to the construction a major offshore wind farm, Baltica 2, and today are adding further PGE renewable energy projects to our portfolio.”
The planned investments will help reduce greenhouse gas emissions and air pollution related to power generation based on fossil fuels. They will mainly be located in regions of Poland where GDP per capita is below the EU average, thus strengthening territorial and economic cohesion.
The development of renewable energy sources like wind and solar requires increased grid flexibility, including storage capacity, which is made possible by pumped-storage hydropower plants. PGE's Porąbka-Żar plant, the second-largest pumped-storage power plant in Poland, can store clean energy during periods of higher production or lower demand.
“Expanding renewables is a crucial element of Poland's energy transition. We need to ensure stable supplies of clean energy to consumers in order to be able to effectively decarbonise the energy sector. The European Investment Bank's support will allow PGE Group to increase the share of green energy in our mix,” said Dariusz Marzec, President of the Management Board of PGE Group.
