KGAL Investment & Lafarge Cement Polska Join Hands for Two Wind Farms in Poland

KGAL Investment & Lafarge Cement Polska Join Hands for Two Wind Farms in Poland

KGAL Investment Management, which claims to be among the first European asset managers in the Polish renewables market, has signed long-term power purchase agreements (PPAs) with Lafarge Cement Polska, a cement producer in Polish market. The two firms have joined hands for the establishment of Krasin and Rywald onshore wind farms, owned by KGAL ESPF 4 renewable energy fund. The two wind farms will be responsible for providing Lafarge with close to 230 GWh of green electricity on an annual basis.

KGAL had set foot into Poland’s renewables market in 2019 and since then, has developed as well as commissioned solar and wind portfolios with a cumulatibe capacity exceeding 110 MW.

KGAL ESPF 4 had acquired the Krasin wind farm, which is for 35 MW, back in May 2020 as a development project. The project has been producing green electricity since 2022-end. Rywald, which boasts of 27 MW of capacity, was introduced two years ago during the project development phase. Presently, it is being tested and slated to add electrcitiy to the grid starting this October.

KGAL maintains that the tender for the said wind farms garnered the attention of commercial offtakers. The tender saw over ten applicants. “For companies, PPAs mean planning security for renewable energy supply in a highly volatile market. KGAL, in turn, can use PPAs to fix attractive electricity prices for a long period of time and thus generate reliable returns,” stated Michael Ebner, Managing Director of KGAL Investment Management. “We chose Lafarge as a partner because the company offered an above-average contract term of 15 years and, moreover, purchases the entire electricity production of both wind farms. In addition, we expressly support Lafarge’s efforts to achieve carbon-neutral electricity supply as a producer in the energy-intensive cement sector.”

A part of the Holcim Group, Lafarge Cement Polska provides sustainable building solutions. Thanks to the PPA that has been recently signed, Lafarge in Poland can meet 50 percent of its electricity needs with sources of renewable energy. “Direct purchases of energy from wind farms support the development of these sources in Poland, as it increases their profitability, and encourages investors to build them. This has a crucial impact on changing the energy mix and accelerates the decarbonisation of the Polish economy,” informed Dawid Robak, CFO Lafarge Poland. “We see the need to support and expand solutions for PPAs and energy management at the national level, as the implementation of climate goals requires long-term solutions for the development of PPAs, for which the market is still waiting.”

Poland is still heavily reliant on fossil fuels for generation of electricity. However, the Polish renewables market is gradually gathering pace. Recently, renewable energy firm Green Genius and Poland-based banking group mBank entered into a financial transaction worth PLN220m (€46m) that will pave the way for the establishment of a 69 MW solar portfolio. Green Genius has large presence in the Polish market and this is the largest deal by the firm here.