- EBRD invests €5 million in €25 million Green Bond issue by Lithuanian developer AEI
- First issuance under a €100 million framework to stimulate fast-growing regional renewables
- Proceeds will develop wind projects in Lithuania, solar assets in Poland
The European Bank for Reconstruction and Development (EBRD) is investing €5 million in a €25 million Green Bond issued by UAB Atsinaujinančios Energetikos Investicijos (AEI). AEI is a Lithuanian fund and renewable energy developer managed by Lords LB Asset Management, with an operating portfolio of 68.1MW of solar assets in Poland and Lithuania and a project pipeline nearly ten times that size for construction in 2022-2024.
This is the first issuance under a €100 million AEI Green Bond Framework, to be listed on the Nasdaq Vilnius Stock Exchange. The EBRD’s participation will be 20 per cent of the first issuance of €25 million. The proceeds will finance renewable projects in Poland and Lithuania.
This will be one of the Bank’s first bond investments into a renewables developer at the holding company level, supplementing traditional project financing at the asset level. There is a growing demand for this type of instruments from both regional and local renewable energy developers, where corporate level indebtedness allows the developers to move up the life-cycle, taking construction risk and gradually becoming independent power producers.
Dynamic growth of the renewables sector is vital if EBRD countries of operation within the European Union, which are more carbon-intensive than the EU average, are to play their part in ambitious EU greening plans. The dominant theme in the European energy sector is the drive towards net zero carbon emissions by 2050. The EU has committed to a binding target of a net domestic reduction of at least 55 per cent in greenhouse gas emissions by 2030 compared to 1990, and achieving climate neutrality by 2050.The European Commission is aiming for a 40 per cent share of renewables in final energy consumption by 2030. These goals require massive investment in renewables in the coming decade, notably from the private sector.
EBRD participation should send a positive signal to other investors given the development bank’s strong credentials as a green investor. The EBRD aims to align all its investments with the goals of the Paris Agreement on limiting global warming to 1.5C by 2023, and make more than half its investments green by 2025.
The EBRD investment in AEI’s bond will support its roll-out into competitive mediumsized wind and solar projects in Poland and Lithuania, thus advancing AEI’s ambition to become a competitive mid-sized regional renewables player.