Poland has taken a significant step towards establishing its first nuclear power plant by approving funding of up to 60.2bn zlotys ($14.7bn).

The funding is crucial for the project, which is still awaiting approval from the European Union, according to a report by Bloomberg.

The government’s decision reflects a commitment to modernise the country’s energy infrastructure.

On Tuesday 7 January 2025, the cabinet led by Donald Tusk adopted a draft bill that permits the government to increase the capital of PEJ, the state-owned utility company. PEJ will be responsible for constructing the 3.75GW reactors along the Baltic coast.

The government will have the flexibility to transfer either bonds or cash to PEJ, depending on the project’s investment timeline.

Poland aims to complete the nuclear power plant by 2036, intending to replace ageing coal-fired plants and ensure a stable electricity supply while transitioning to cleaner energy sources.

The new equity will represent 30% of the total funding, with the remaining 70% expected to come from debt financing through the US Export-Import Bank and other financial institutions.

Wojciech Wrochna, a government official overseeing critical infrastructure, noted that discussions with the EU could extend beyond one year.

Following these negotiations, Poland plans to finalise agreements with Westinghouse Electric and Bechtel Group.

The funding decision coincides with an investigation by the European Commission into Poland’s proposal for state aid related to the project.

The proposal includes not only equity injections but also a contract for difference for power generated by the plant and state guarantees for PEJ’s debt.

In December 2024l the EU’s executive arm expressed concerns, stating it has “doubts at this stage on whether the measure is fully in line with EU state aid rules.”

In August, Poland announced an investment of 4.6bn zlotys ($1.2bn) from its 2025 budget to kickstart the development of the nuclear power plant.

The initiative is part of a broader strategy to diversify the nation’s energy mix and lower electricity costs.