PGE Polska Grupa Energetyczna S A : Growth of PGE Group’s onshore wind farms portfolio

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Growth of PGE Group's onshore wind farms portfolio 01.04.2022

PGE has signed a conditional agreement to purchase three onshore wind farms with total capacity of 84.2 MW. Conclusion of the transaction will result in 12 percent increase of PGE Group capacities in onshore technology that will amount to more than 770 MW. The completion of the acquisition will sustain the leading position of PGE Group on renewable generation market in Poland with market share of 11 percent of installed capacities in onshore wind farms in Poland.

In 2021, for the first time in history of PGE Group business activity, the renewable generation segment achieved EBITDA result exceeding 1 billion zlotys. This result proves the growing role of renewable energy sources in PGE Group. The large scale acquisition of three onshore wind farms with total capacity of 84.2 MW, that has been already signalized, strengthens the green transition in PGE Group. With an installed capacity of over 770 MW in onshore wind farms, we have strengthened our leading position in renewable generation market in Poland - says Wojciech Dąbrowski, president of the Management Board of PGE Polska Grupa Energetyczna.

For the PGE Group, the acquisition of three onshore wind farms means the growth of onshore wind farms capacities from 688 MW to 772 MW and an increase of market share from 9.6 percent to 10.8 percent (according to the data of Agency of Energy Market, the installed capacity of onshore wind farms at the end of 2021 amounted to nearly 7,117 MW).

The farms, being a subject of the acquisition, are located in three different provinces: Kujawsko-pomorskie voivodeship (Radzyń Wind Farm with capacity of 36.9 MW), Łódzkie voivodeship (Ścieki Wind Farm with capacity of 22 MW) and Wielkopolskie voivodeship (Jóźwin Wind Farm with capacity of 25.3 MW). The assets involved in the transaction comprise 32 wind turbines with total capacity of 84.2 MW and an average annual generation of 240 thousand MWh, that may ensure the electricity demand of ca. 120 thousand households ie. the electricity demand of city of Lublin. All farms have long term PPA agreements that partly secure volumes of generated energy even until 2030. The farms will benefit from the support system in form of green certificates until ca. 2030.

Farms are characterized by high productivity, in particular the Radzyń Wind Farm, which net capacity utilization at a level above 3,400 FLH (full load hours) is similar to the values achieved by offshore wind farms. In addition, the Ścieki Wind Farm is located in the immediate vicinity of the Skoczykłody Wind Farm acquired by PGE in 2020, which will enable the generation of additional synergies within the PGE Group.

The transaction is an element of implementation of PGE Group strategy until 2030, which assumes that in 2030 PGE Group will operate 1.7 GW of onshore wind farm capacities to be achieved also through acquisitions. The long term strategic goal is carbon neutrality of PGE Group by 2050 and to provide PGE customers with 100 percent of green energy. Investments and acquisitions in renewables segment will contribute to the achievement of this goal.

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About the transaction

The acquisition is carried out by PGE Energia Odnawialna, PGE's subsidiary, which concluded a conditional sale agreement with Vanadium Holdco Limited, under which PGE will acquire 100 percent shares in Collfield Investments holding 100% shares in three SPVs operating three wind farms with a total capacity of 84.2 MW. The condition precedent to the Transaction is obtaining consent of the Office of Competition and Consumer Protection. The closing of the Transaction is planned in the second quarter of 2022. The value of the transaction will exceed 900 million zlotys (including cash in the accounts of Collfield and its subsidiaries) and will be calculated at the transaction's closing date, based on the relevant mechanisms of the agreement.