EBRD reduces financing for Polish renewables due to investment uncertainty

18/04/2017 11:27 Energy Market

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The European Bank for Reconstruction and Development reduced its support for wind farms in Poland since there are less projects as government policies have made them unprofitable, as stated by a top EBRD official.

During past few years, several private investors spent together approximately 34 billion zlotys ($8.5 billion) on the construction of wind farms in Poland, making the country less dependent on coal and bringing it closer to European Union carbon emissions targets. However, these investors are enduring losses and might not invest more, according to Grzegorz Zielinski, EBRD's Poland chief.

 

This could transform Poland in a country unattractive for investments and the latest numbers show a decline of 5.5% in total investment in 2016, which is the biggest drop in 14 years.

 

In the energy sector, the ruling Law and Justice party (PiS) wishes to keep coal as the main energy source of energy in Poland, seeing renewable energy as unstable. It has introduced laws on wind farms that have made the majority of them unprofitable.

 

The government unpredictably banned constructing wind farms too close to dwellings in 2016 and enforced a higher property tax on wind farm possessors.

 

The subsidy system for renewables, based on tradeable green certificates, has also become overflowing and generated a decline in prices, which has affected wind farms' cashflows.

 

Critics declared that these policies may lead Poland to miss the EU objective of producing 15 percent of its electricity from renewable sources by 2020.

 

EBRD offers funding for energy projects intended for reducing emissions, principally renewable sources and electricity distribution. It spent approximately 100 million euros on energy projects in Poland in 2016, down from almost 250 million euros annually in the previous years.

 

In 2017 EBRD hopes Poland to review its policy on the renewable energy projects.

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