An equity investment of EUR 67.5m in the initial public offering ("IPO") of AB Ignitis Grupe ("Ignitis Grupe", the "company"), a leading utility and renewable energy company in the Baltics region. The EBRD's subscription accounted for 15% of the shares newly issued in the IPO, equivalent to 4% of the company's total stake. The company's shares are now dual-listed on the Vilnius Stock Exchange and the London Stock Exchange.
The goal is to support the largest IPO in the Baltics region, a milestone for regional capital markets development. The proceeds of the Bank's subscription will be used to finance the company's distribution network investment programme.
ETI score: 60
The operation will deliver climate mitigation benefits through energy efficiency, network modernisation and new green investments ("Green" transition quality).
The operation will also make an important contribution to the local equity capital markets development, a key objective of the Bank in the Baltics ("Resilient" transition quality).
IGNITIS GRUPE AB
EBRD Finance Summary
3,000,000 subscription into the Company's common shares.
Total Project Cost
Financing Structure: The Bank's financing is to provide a valuable signal to the market, support the transaction as key anchor investor, enhance the corporate governance and facilitate a successful placement in the current environment given the COVID-19 outbreak.
Risk mitigation: The Bank's involvement provides comfort to clients and investors, by mitigating non-financial risks.
Environmental and Social Summary
Categorised B (2019 ESP). The Transaction is an equity investment as part of an IPO aimed at supporting capital markets in Lithuania and the Bank's due diligence has been limited to a review of publicly available documents, questionnaire and discussion with the Company's EHS management by the ESD specialists which allowed the ESD to undertake an adequate assessment of environmental and social risks and impacts of this Transaction in accordance with the Bank's 2019 ESP.
The Bank's use of proceeds are aimed at strengthening the electricity distribution network needed for the development of renewable energy projects and improving energy efficiency. The Bank undertook a corporate audit as well as reviewed these investments as part of the ESDD. The Group has a dedicated EHS management team, which is developing corporate EHS management systems and has the institutional capacity to implement the Bank's Performance Requirements. It develops sustainability and non-financial reports for the Group and individually for some subsidiaries. These reports show that, overall, the Company has a good compliance record and no material non-compliance issues have been identified. The ESDD has also confirmed that the Company has good HR Polices in line with best practice and is implementing COVID-19 response measures. There are no plans for retrenchment or restructuring at present.
The EBRD proceeds will not be used for any Category A projects and the Company will not invest in any coal fired units in the future. The Company does not plan any A category project and any future Projects will be screened in line with EBRD requirements and information published in line with National, EU and the Bank's requirements.
An ESAP has been developed and agreed based of the findings of the ESDD and in addition to the above, it will include requirements relating to, among others, strengthening of non-financial reporting in line with best practices and EU law and associated guidance on climate related information. The Company commits to implement TCFD and report in line with the recommendations by 2023. The ESAP further requires that if the Company was to develop projects in sensitive areas or of a sensitive nature, those would need a full ESIA in line with the Bank's requirements.
The Bank will monitor the Company's performance through reviewing annual reports prepared by the Company and site visits as deemed necessary.
Technical Cooperation and Grant Financing
Company Contact Information
+370 620 74043
Ignitis Grupe, Zveju str. 14, LT-09310, Vilnius, Lithuania
PSD last updated
25 Nov 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to firstname.lastname@example.org. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email email@example.com to get guidance and more information on IPAM and how to submit a request.