Bank Gospodarstwa Krajowego (BGK) and Tauron have signed a loan agreement that will provide the energy company with PLN 11 billion for modernizing and upgrading its power distribution network. The funds will help adapt the network to the increasing number of renewable energy sources (RES). This record-breaking financing represents the largest investment to date in support of Poland’s energy transformation. The funds come from the National Recovery and Resilience Plan (KPO).
The loan for Tauron Group is the first to be granted by BGK under the distribution network segment of the KPO.
“We have just signed the first agreement. PLN 11 billion in European funds is the largest amount granted to a single entity. We hope that Tauron will transform the energy network in the south of the country as efficiently as it negotiated this agreement,” said Prof. Marta Postuła, First Vice President of BGK, in an interview with Newseria. “BGK manages 10 agreements commissioned by various ministries, with a total value of EUR 60 billion. As a development bank, we are responsible for executing such projects. One of these is the Energy Support Fund, which finances projects related to energy networks, renewable energy, and energy storage — the broader energy transformation.”
PLN 16 Billion for Poland’s Energy Transformation
Under the Energy Support Fund, part of the KPO, a total of EUR 16 billion (approximately PLN 70 billion) will be allocated for investments supporting Poland’s energy transformation. These funds will be distributed to companies in the form of preferential loans.
“The PLN 11 billion will be used for modernizing and developing the power distribution network, automating and digitizing it, as well as connecting new customers and increasing capacity for renewable energy sources. This comprehensive investment will make the energy grid more flexible, stable, and reliable, and ready for further connections,” said Grzegorz Lot, President of Tauron Polska Energia.
Outdated Infrastructure a Bottleneck for Energy Transformation
Poland’s outdated and underfunded energy networks remain a major obstacle to the country’s energy transformation. According to this year’s report by the Supreme Audit Office (NIK), over half of Poland’s power networks are more than 30 years old, hindering the integration of new renewable energy sources. Without significant investment in infrastructure, accelerating the energy transition and reducing reliance on coal will be impossible.
“Transforming the energy networks is a crucial project for Poland. We have often complained that we have almost everything we need except for modern energy networks. Now we have substantial funds to address this,” emphasized Prof. Marta Postuła.
Loan Terms and Long-Term Strategy
The funds will be disbursed progressively as Tauron submits investment progress reports. The loan carries a fixed annual interest rate of 0.5%, and repayment is scheduled between 2034 and 2049 in semi-annual installments.
“The loan terms are very attractive for us. The long, 25-year repayment period will significantly extend Tauron Group’s average debt maturity. BGK is our key partner in securing financing for transformation goals, and we are pleased with the prospect of long-term, fruitful collaboration,” said Krzysztof Surma, Vice President for Finance at Tauron Polska Energia.
“Distribution and infrastructure development are the foundation of our strategy. Funds from European or other sources enhance our profitability and growth potential,” added Grzegorz Lot.
Tauron’s Ambitious Plans
As Poland’s largest energy distributor, Tauron plans to invest PLN 60 billion by 2035 in expanding and modernizing the network. These investments will enable the connection of new consumers and renewable energy sources, as well as the automation and digitization of the power grid. This is a key element of Tauron’s newly announced 2025–2035 strategy.
Tauron serves 6 million customers connected to its distribution network, including those consuming electricity produced from renewable sources. The company aims to achieve over 6 GW of installed capacity in renewable energy and energy storage by 2035. By 2040, Tauron plans to source 100% of its energy from clean sources and achieve climate neutrality.
Source: ManagerPlus
