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First transaction by LOTOS and Polskie Inwestycje Rozwojowe
Thanks to committed efforts by Polskie Inwestycje Rozwojowe S.A. and two banks, Bank Gospodarstwa Krajowego and Bank Pekao S.A., LOTOS will obtain financing for development of the B8 field.
On August 25th 2014, a special purpose vehicle, wholly-owned by LOTOS Petrobaltic, entered into agreements with Polskie Inwestycje Rozwojowe, Bank Gospodarstwa Krajowego and Bank Pekao S.A. for the financing of development of the B8 field in the Baltic Sea. The transaction is the first production project in Central Europe to be funded on a project finance basis, and is expected to enhance Poland's energy security.
The project, worth nearly PLN 1.8bn, will consist in development of the B8 field in the Baltic Sea by LOTOS Petrobaltic, an E&P subsidiary of Grupa LOTOS. So far, development work on the B8 field has been financed using the company's internally generated funds. Under the new agreements, the project will be carried out on a project finance basis by a special-purpose vehicle wholly owned by LOTOS Petrobaltic. The B8 field licence and a drilling platform will be transferred by LOTOS Petrobaltic to the SPV as a contribution in kind. The SPV will carry out the remaining development work on the B8 field, including conversion of the drilling platform into a production centre, preparation of subsea infrastructure, and drilling of the last injection wells before the start of production.