Funding Halts for Poland's Last Coal-Fired Power Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The future of the last coal-fired power plant project to be built in Poland has been cast into doubt after the backers suspended funding.

Project owners Enea SA and Energa SA have pulled funding estimated at $1.7 billion for the proposed 1,000-megawatt (MW) Ostroleka C power plant, citing difficulty with obtaining external financing. The project got underway last year and had an expected commissioning date of 2023. They cited other changing conditions including "planned changes to the European Union's policy with regard to the electricity sector, including the introduction of the so-called Green Deal, a new lending policy at the European Investment Bank (EIB) towards the power sector and a public call for PKN Orlen to buy 100% of Energa shares."

Construction started on the plant last November, but the backers said that the decision to suspend has now been communicated to the general contractor of the power plant block--a consortium of GE Power and Alstom Power Systems--as well as a consortium of Torpol and Zakłady Automatyki Kombud which were implementing the reconstruction of the railway infrastructure for the operation of the new plant.

"The decision to suspend financing of the project may also result in suspension of works on the construction of Ostrołęka C," the statement said. "The contract concluded by the special purpose company--Ostrołęka Power Plant--with GE Power and Alstom Power Systems provides for the possibility of temporarily suspending the performance, part or all of the obligations arising from it. The maximum total suspension period during the project implementation is 90 days. According to the contract, the project completion deadline is 56 months, counted from the date of issuing the work commencement order. The suspension period provided for in the contract does not automatically mean a change in the date of completion of the investment by the general contractor."

The Ostroleka C project has already come under fire in recent years from environmental groups and the EU, as Poland is the only country in the EU still almost completely reliant on coal-fired power. Polish refiner PKN Orlen recently revealed plans to buy Energa to boost its position in the electricity market and hinted that it would consider replacing coal-fired units with gas-fired units at the Ostroleka C plant. Poland's Minister responsible for energy infrastructure, Piotr Naimski, recently commented that any proposed switch to gas would delay the project by years.

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