Too expensive capital is a leg to develop the Polish wind energy

The high cost of capital in 2025 and in the following years will be one of the most important factors conditioning the pace of land of land wind energy in Poland – according to a report prepared by experts of the consulting company TPA Poland/Baker Tilly TPA, PSW and DWF office.

“Their cause are both macroeconomic factors (including high reference rates in PLN) and geopolitical, as well as specific conditions of the domestic market, including regulatory risk and limited system support for new investments. Despite the progressive professionalization of the market and the growing interest of institutional investors, high debt costs, regulatory risk and uncertainty as to future support mechanisms investing in our country ” – it was written in discussing the report.

It was stated that in Poland wind projects are implemented primarily in the Project Finance formula, which means that financing is secured on the assets of a special purpose company, not on the investor's assets.

“Standard, banks are willing to provide financing at 60-70 percent of the value of investment outlays (Capex) and development costs, which is a result clearly lower than in Western Europe, where this level reaches up to 70-80 percent” – written.

It was estimated that high bank margins are an important barrier to the development of the sector.

“Additionally, High interest rates in Poland generally limit the credit action of bankswhich also translates into their tendency to lending investments in renewable energy. As a result, the availability of loan is limited, and the cost of obtaining debt for investors is clearly higher than in Western European markets, “it was written.

It was stated that one of the key factors affecting the amount of capital cost are local regulatory and operational risks.

“In Poland, investors must face legislative uncertainty, frequent changes in law and specific risks related to the energy production profile in sources such as wind or PV. Auction system, although formally available, does not currently provide sufficient support for new projects, and the limited number of long -term contracts (PPA, CPPA) hinders the security of bank financing” – it was written in the report. (PAP Biznes)

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