This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
Tensions are mounting between Orlen and the private industrial group Synthos over their joint investment in small nuclear reactors. The partnership, launched several years ago by Orlen’s former chief executive Daniel Obajtek, is now increasingly viewed within government circles as a problem. Does the project still stand a chance of succeeding?
State-controlled Orlen and Synthos Green Energy, part of businessman Michał Sołowow’s portfolio, are engaged in tough negotiations over the future of their cooperation in nuclear energy. Their joint venture, Orlen Synthos Green Energy (OSGE), in which both parties hold a 50% stake, has been operating since 2022.
From the outset, its objective has been to build a fleet of small modular reactors (SMRs) using the BWRX-300 technology developed by the American company GE Vernova Hitachi Nuclear Energy. The partnership was forged when the Law and Justice (PiS) government was in power and Daniel Obajtek was at the helm of Orlen. The project continued to advance despite concerns raised by Poland’s Internal Security Agency (ABW).
Explainer
Daniel Obajtek
Daniel Obajtek is a controversial Polish businessman and politician who served as CEO of PKN Orlen, Poland's state-controlled oil refining giant, from 2018 to 2024 under the previous Law and Justice (PiS) government.
During his tenure, he oversaw massive expansion projects including the acquisition of smaller rival Lotos and German refiner Bayernoil, transforming Orlen into Central Europe's largest energy company, though critics accused him of empire-building and politically-motivated deals that benefited the ruling party.
His leadership was marked by allegations of conflicts of interest, questionable business practices dating back to his time as mayor of a small town, and a combative relationship with independent media, while supporters praised his ambition and business acumen.
After PiS lost power in late 2023, Obajtek became the target of multiple investigations by the new government and prosecutors, fled to Hungary (avoiding a parliamentary summons), and was recently elected to the European Parliament on a PiS ticket - a move seen as seeking parliamentary immunity from prosecution.
He remains a deeply polarizing figure who embodies the broader political divisions in Poland, with opponents viewing him as a symbol of cronyism under PiS rule and allies defending him as a victim of political persecution by the current Tusk government.
The atmosphere surrounding the partnership between the two domestic heavyweights has deteriorated markedly, however, since the change of government and leadership at Orlen. The energy group’s current chief executive has argued that new rules of cooperation need to be established. Meanwhile, frustration is growing within the Ministry of State Assets over the protracted discussions.
Tough negotiations
The terms of cooperation between Orlen and Synthos on small-scale nuclear power have never sat well with Orlen’s new management. Ireneusz Fąfara, who has led the fuel and energy group since 2024, says so openly.
“From the moment we took over the company, we have consistently said that this is a technology that interests us and one in which we believe. However, we felt from the outset that the way Orlen became involved in this project was flawed. Our position within the joint venture was not commensurate with our financial contribution, which is why we entered into negotiations with our partner.
We managed to achieve almost all of our objectives except one. Under the agreement signed with our partner, we are obliged to pursue only an SMR project based on BWRX-300 technology. That does not mean we want to pursue a different project. However, we wanted the flexibility to respond if another technology emerged on the market. We were unable to secure that. Our partner has been very tough in these negotiations,” says Ireneusz Fąfara, Orlen’s chief executive.
Who pays for what?
According to our information, the fiercest dispute concerns the financing of the nuclear investments.
Orlen has already succeeded in negotiating equal rights for both parties in appointing the management of the nuclear venture, as well as the transfer to OSGE of the SMR technology rights previously held by Synthos. But that has not been enough.
Sources within the fuel and energy group say Orlen would prefer to focus on financing the special-purpose vehicles that will build small nuclear power plants directly adjacent to its own industrial facilities. The first reactors are planned for Włocławek, next to the Anwil fertilizer plant, which is part of the Orlen group.
The company wants to avoid a situation in which its funds are used to finance the construction of similar units near Oświęcim, where Synthos operates its chemical plants.
“Our goal and ambition is for our partner to profit from working with us, not from us. That is why we have presented terms of cooperation for this project that are consistent with our operating philosophy – the philosophy of a state-controlled company. We are currently negotiating the conditions of that cooperation,” Mr. Fąfara said.
The other side of the dispute is keeping its comments brief.
“The discussions are progressing well,” Rafał Kasprów, chief executive of OSGE and a representative of the Synthos group, told us.
Never-ending discussions
The entire affair has become an awkward issue for the current government. The alliance between the two corporate giants was launched under the previous Law and Justice (PiS) administration. Even then, during the process of obtaining a so-called decyzja zasadnicza (crucial decision) – the government’s formal political approval for the investment – Poland’s Internal Security Agency (ABW) issued a negative opinion on OSGE’s nuclear projects.
The negotiations between the partners, which have been dragging on for two years, may provide a way of extending the time before Orlen is forced to make a final decision on the project.
“In two years, everything could have been negotiated. Yet it now turns out that there are still issues that need to be discussed,” says a source familiar with the talks.
Signs of growing impatience are also emerging from the Ministry of State Assets (MAP).
“Both sides are still talking instead of focusing on delivering the investment. Rather than remaining locked in a tug-of-war, they need to move forward. Orlen should conclude the discussions and make a final decision on the direction of this partnership,” a ministry source told us.
For his part, Wojciech Balczun, Poland’s Minister of State Assets, insists that the fact the SMR project was initiated during Daniel Obajtek’s tenure is of no relevance to him.
“In energy projects of this scale, what matters is substance, not who initiated them. Small modular reactors are a technology currently being assessed by many countries and energy companies. It is therefore entirely natural that Orlen continues its conceptual and analytical work.
Our responsibility as the owner is to ensure that every decision is preceded by a thorough assessment of risks, costs and the realistic prospects for implementation. Cooperation with Synthos Green Energy is one of the promising options under consideration.
Nuclear projects require a long-term perspective and stable analysis, not abrupt changes of course. We will therefore assess them on the basis of facts and the national interest, not personal histories,” Mr. Balczun, the Minister of State Assets, said in a recent interview with the XYZ portal.
Former Orlen chief pushes back against criticism
Daniel Obajtek – former CEO of Orlen and now a Member of the European Parliament representing Law and Justice (PiS) – rejects any suggestion that the agreement signed with Synthos Green Energy was flawed.
“This agreement is beneficial for Orlen. It gives us access to the most advanced SMR technology currently under development. In Canada, construction of such a reactor has already begun. The investor is OPG, a company with extensive experience in nuclear energy. Choosing a different technology would significantly extend development timelines, thereby increasing investment risk.
The parties to the agreement share the same goal: to build the first BWRX-300 reactors as a power source for their industrial facilities – Synthos for its plants in Oświęcim, and Orlen for its facilities in Płock and Włocławek. This alignment mitigates any potential divergence of interests between the parties. The agreement reflects a balance of risks and benefits for both partners and is therefore mutually advantageous. However, these benefits may be limited in the event of project delays,” Daniel Obajtek told us.
He argues that Poland’s energy system requires new, stable power plants that can serve as an alternative to ageing coal-fired units.
“The ideal solution is an SMR based on the proven, safe and relatively least complex BWR technology. Orlen also analyzed other technologies, and the only reasonable option was the BWRX-300 SMR. It remains as rational and viable today as it was several years ago.
What is concerning, however, is that the pace of work at OSGE is not what it was when I was running the group. The Polish energy system needs nuclear power to ensure long-term security of supply,” Mr. Obajtek said.
What about large nuclear power?
Orlen has also revealed that it does not rule out participating in the future construction of a second large nuclear power plant planned by the government.
The first such facility will be built on the Baltic coast in Pomerania, where preparatory works on the site are already under way. The second project, by contrast, remains at the planning stage. Securing financing for it will be more challenging than for the first plant. The Pomerania investment alone will draw as much as PLN 60bn (EUR 13.9bn) directly from the state budget.
The second nuclear plant is expected to rely on cooperation with industrial energy consumers that would use its output.
“Under our agreement with Synthos Green Energy, we are obliged to implement only the SMR project using BWRX-300 technology. However, the agreement does not prevent us from engaging in another nuclear project that is not based on SMR technology. Therefore, we cannot rule out a situation in which we become involved in the construction of a second nuclear power plant, although no such work is currently under way.
These options exist, and when we are faced with a choice, we will have to analyze them and select the project that will be completed faster, as this is the priority,” Orlen CEO Ireneusz Fąfara said.
Our sources suggest this may also be part of Orlen’s negotiation strategy with Synthos. The message is that if Synthos does not accept Orlen’s conditions, the company could abandon SMRs in favor of large-scale nuclear power.
In practice, however, this scenario is highly uncertain. First, the construction of a second nuclear plant in Poland remains undecided. Second, work on the first BWRX-300 reactor has already begun.
In Canada, in April this year, a complex operation was carried out to install the reactor building foundation into a excavated shaft at the construction site. The second project of this type in the world was originally expected to be developed in Poland by OSGE.
Expert's perspective
Political declarations are not enough for SMR development
Poland has significant potential to develop SMR technology. However, unlocking it will require more than political declarations or isolated industrial initiatives. The country is making progress: nuclear energy is increasingly recognized as a key pillar of decarbonization, and the draft update of the Polish Nuclear Energy Program provides a stronger foundation for deployment. Nevertheless, Poland still needs a comprehensive SMR roadmap, integrated into a broader nuclear, industrial and energy security policy.
SMRs should not be seen as a substitute for large-scale nuclear power plants, as they serve different functions. Large reactors are essential for decarbonizing the entire energy system, while SMRs are better suited to applications requiring smaller, locally integrated units – for example near energy-intensive industrial facilities, in former coal regions, or within district heating systems. In these areas, SMRs could deliver the greatest added value for Poland.
Globally, only a very limited number of SMR projects are currently in operation. Most Western initiatives remain at the development, pre-licensing or design stage. While this does not justify passivity on Poland’s part, it underscores the need for strategic planning to enable early SMR deployment. Only the completion of Poland’s first small nuclear reactor will allow for a meaningful assessment of the technology’s feasibility and its initial economic potential.
Rather than pursuing isolated pilot projects, the Polish government should focus on building systemic frameworks that enable repeatable deployment across multiple sites. Cost reductions will depend on standardization, accumulated operational experience, and appropriate regulatory and financing frameworks.
It is also necessary to develop mechanisms for better coordination of SMR development across ministries and other public administration bodies. Early projects may require strong state involvement to manage the risks associated with first-of-a-kind construction.
However, subsequent projects should increasingly rely on private capital and green financing instruments aligned with EU regulations.
Key Takeaways
- Between Orlen and Synthos Green Energy, tough negotiations are under way over joint investments in small modular reactors (SMRs). Orlen objects to the fact that the agreement obliges it to pursue SMR projects exclusively in the American BWRX-300 technology. “This does not mean we want to pursue a different project, but we wanted the ability to respond if another technology appears on the market,” argues Orlen CEO Ireneusz Fąfara. Our information indicates, however, that the main sticking point concerns the financing structure of individual nuclear projects.
- Rafał Kasprów, who represents the Synthos group on the management side of Synthos Green Energy, avoids public confrontation with Orlen. “The talks are progressing well,” he says briefly. Meanwhile, our sources indicate growing impatience within the Ministry of State Assets. For the government, the Orlen–Synthos agreement is politically sensitive, as it was concluded under the previous Law and Justice (PiS) administration. Even at that time, Poland’s Internal Security Agency (Internal Security Agency (ABW)) issued a negative assessment of the planned nuclear investments. Daniel Obajtek, who led Orlen when the agreement with Synthos was signed, rejects any criticism and argues that the contract was beneficial for both sides.
- The non-governmental organization Clean Air Task Force (CATF) argues that SMRs could be a good solution for Poland. They would provide a clean source of stable baseload power, complementing large nuclear plants and renewable energy sources. Their use is expected mainly in industry, district heating, and former coal regions. According to CATF, developing SMRs requires more than political declarations or isolated industrial initiatives. Poland needs a comprehensive SMR action plan (a roadmap) integrated with broader nuclear, industrial, and energy security policy.