Poland's biggest power group PGE and Denmark's Orsted have finalized a deal to jointly develop two offshore wind projects in the Baltic Sea, PGE said on Thursday.
Under the terms of the deal, Orsted bought 50% in each of two PGE units developing two offshore projects totalling 2.5 gigawatts (GW). The transactions were worth a combined 686 million zlotys ($181 million).
"This is the price for today which guarantees that PGE will not incur any additional investment outlays on this project until the final investment decision," PGE Chief Executive Wojciech Dabrowski told Reuters.
He said the final deal value could rise by up to an additional 1 billion zlotys, depending on the final terms of the investment.
PGE, which produces most of its electricity from coal, has been discussing the projects with Orsted, the world's biggest developer of offshore wind, since the end of 2019. The companies struck an initial deal in February.
PGE expects to have at least 6.5 GW in offshore wind capacity by 2040 as part of a shift to clean energy sources.
It expects power from Baltic Sea wind farms to account for 40% of its generation in 2040, provided its coal assets are split off into a separate company as planned.
Poland was the only member of the European Union not to commit to climate neutrality by 2050 when the bloc set the target in 2019, but it has encouraged more investment in clean energy under EU pressure to cut emissions.
($1 = 3.7933 zlotys)
(Reporting by Agnieszka Barteczko and Anna Wlodarczak-Semczuk; Editing by Edmund Blair)