Energy transition and digital infrastructure are two areas in which clients are increasingly asking for advice in Poland – areas of the Polish economy which have thus far proved highly resilient to the COVID-19 pandemic.
Why energy transition? The shift towards a fossil-fuel-free economy is critical. For Poland, which is one of the EU’s most carbon-intensive economies, this transition will require a massive investment for years to come not only in the power sector, but also in transport and heating. Throughout 2020, Linklaters Warsaw has been busy advising leading infrastructure funds and financial institutions on how best to participate in Poland’s transition towards a zero carbon economy.
The proportion of fossil fuels in the energy mix needs to be brought down, and renewables increased, as set forth in the EU Renewable Energy Directive and the Polish Energy Policy until 2040. The CEE countries have generally lagged behind other EU member states in investing in renewable technologies, but this delayed uptake has proven to be to the late-movers’ advantage. Linklaters’ Warsaw Energy & Infrastructure team has been involved in many of the onshore wind deals in the Polish market. Together with the firm’s Banking team, we have developed an innovative financing structure through which the first fully unsubsidized onshore wind project in Poland was financed. The Polish government plans to ease onshore wind farm development restrictions, which will further boost the development, transactional, and financing advice-giving work in this very hot sector.
Poland, which has historically been dependent on cheap domestic coal for power, is now set to become one of the largest wind centers in Europe, with the total Baltic Sea capacity of up to 12 GW to be awarded with contracts for difference (CfD) by 2028. Seeking out the opportunities that the expanding offshore wind market presents, Linklaters’ Warsaw Energy & Infrastructure team advised on the first offshore wind deal ever in Poland, and we have been involved in three of the four major offshore wind transactions in Poland to date. At the end of November 2020, the Polish government adopted a draft law aimed at developing offshore wind farms, which is scheduled to enter into force in early 2021. This legislation will provide a stable legal framework for this technology and 25-year CfD support to attract investors and financiers.
The energy transition is more than developing renewable energy sources; it is also about generating power in a more efficient way and managing waste. The best example of this is showcased by the EUR 780 million PPP waste-to-energy project, which is the most valuable public–private partnership project ever in Poland. Linklaters’ Warsaw team assisted the sponsors to ensure the thermal conversion of municipal waste into energy via a high-efficiency cogeneration formula. This is a landmark project on the market and paves the way for clean thermal energy in Poland.
Digitalization is another sector that keeps infrastructure lawyers busy. Poland and other countries in the CEE region need to close the digital gap and invest heavily in their digital economies. Thus, new deals are coming from the telecoms industry, where broadband infrastructure has become a core focus for the private sector. The Linklaters Warsaw team is seeking out new opportunities to assist its clients in this fast-growing sector.
Infrastructure and energy-related investment will surely play an important role in stimulating the post-pandemic recovery. Thus, the prospects for legal work in this area look promising and Linklaters Warsaw is well placed to advise its clients as they seek to develop these areas.
By Patryk Figiel, Head of Energy & Infrastructure, Linklaters Warsaw