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UK’s REH bags Polish wind farm deal

AIM-listed Renewable Energy Holdings (REH) has signed a deal to develop a wind farm site in Poland.

The site, in the mountainous region of Kobylany in South East Poland, will be have a generating capacity of up to 30MW, says REH. Poland currently has around 350MW of total installed wind power capacity.

REH has entered a conditional sale and purchase agreement with Gamar GHL for the site in Kobylany. That means REH has paid €100,000 up front for an option to purchase Gamar GHL for the full price of €2m if all the required planning, construction and operating permits for the wind farm site are obtained.

But REH can terminate the deal if it is unable to obtain financing or if Gamar GHL doesn’t get all the permits by the end of June 2009. REH says it will apply part of its existing loan facitly with Standard Chartered Bank to the construction and development of the Polish wind farm.

Mike Proffitt, CEO of REH, said:

“We are delighted to be signing this agreement as, along with our recently announced 70MW Wales project, it consolidates our plan to have 150MW of wind power within five years of our entry onto the AIM. Our independent wind assessment has yielded very favourable results and we look forward to a strong performance from this asset.”

It won’t be an easy ride, however, as electricity distributors in Poland have made it a difficult and lengthy procedure for wind farms to get connected to the main power grid.

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