Lietuvos Energija Green Bond 2

Location:

Lithuania

Project number:

50268

Business sector:

Energy

Notice type:

State

Approval date:

20 Jun 2018

Status:

Signed

PSD disclosed:

23 Oct 2018

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

Investment in EUR-denominated green bond in an amount of EUR 30 million as part of a total aggregate issuance of EUR 300 million by Lietuvos Energija UAB ("LE UAB"), the Lithuanian's national energy company and one of the largest state-owned energy groups in the Baltics.

The green bond is the second issuance by LE UAB following the first issuance in July 2017 which the EBRD also invested.

Project Objectives

The investment programme which the EBRD is supporting is critical to help LE UAB to upgrade its distribution network and expand its renewable energy capacity in order to strengthen the sustainability and security of Lithuania's energy supply and reduce its reliance on imported energy.

The issue will also enhance LE UAB capital structure by centralising indebtedness at the holding level.

Transition Impact

ETI score: 61

Green: the project will deliver climate mitigation benefits through energy efficiency. The green bond will support the investment plan of the company which includes new green investments in distribution network upgrades.

Resilient: The project will contribute to the development of the Lithuanian capital markets, through supporting the issuance of a EUR 300 million green bond in the Baltics.

Client Information

IGNITIS GRUPE AB

LE UAB is a Lithuanian state-owned energy company and one of the largest state-owned energy groups in the Baltic countries, who mainly operates in (i) distribution of electricity and gas, (ii) generation of electricity and heat, and (iii) trading and supply of electricity and gas.

EBRD Finance Summary

EUR 30,000,000.00

Total Project Cost

EUR 300,000,000.00

Environmental and Social Summary

Categorised B (2014 ESP). Environmental and Social Due Diligence ("ESDD") was undertaken by the Bank's environmental and social specialists building on the ESDD undertaken for the previous subscription of the green bond issued the Company in July 2017. In compliance with capital market transaction rules and regulations, the ESDD was undertaken by reviewing publicly available information and discussions with the Company's green bond team. The ESDD focussed on reviewing the Company's implementation of its green bond framework.

The ESDD re-confirmed that the Company green bond framework is structured to comply with Green Bond Principles (GBP), voluntary process guidelines that recommend transparency and disclosure and promote integrity in the approach for issuance of a green bond. The cornerstone of the GBP is the utilisation of the proceeds of the bond for eligible green projects, which provide clear environmental benefits that can be described and, where feasible, quantified and/or assessed. The Company's green bond has also obtained independent second opinion and, based on the overall assessment of the project types that will be financed by the Company's green bonds and governance and transparency considerations, has received a "Dark Green" shading, which is allocated to projects that corresponds to the long-term vision of a low-carbon and climate resilient future. Typically this will entail zero emission solutions and governance structures that integrate environmental concerns into all activities.

The ESDD showed that the Company has implemented its green bond framework to high standards, and their annual impact reporting has shown that the green projects have achieved their expected environmental benefits.

The proceeds of the bond will be used for financing of renewal and/or rehabilitation of existing electricity distribution lines. The planned distribution network investments include changing overhead lines to underground cables, renewal and/or rehabilitation of overhead lines, substations & transformers, as well as smart network solutions. These investments will result in significant loss reductions and energy efficiency and safety improvements, and particularly the smart solutions will also increase the system capacity to integrate renewable energy in the grid. Given the nature of improving the existing network infrastructure, no resettlement or biodiversity impacts are likely to occur. Therefore, these rehabilitation projects are not subject to Environmental Impact Assessment (EIA). Nevertheless, all projects will be required to obtain environmental approvals and permits, including Natura 2000 declarations.

An ESAP has been agreed under a previous framework agreement and this is being implemented by the Company. The Bank will monitor the project implementation

Technical Cooperation and Grant Financing

None.

Company Contact Information

Ainė Riffel
aine.riffel@ignitis.lt

Implementation summary

Lietuvos Energija Green Bond 2 (50268)

Lietuvos Energija UAB has changed the name to Ignitis grupe AB ("Ignitis Group") during the implementation period.

The EBRD proceeds of EUR 30 million were invested into the distribution network upgrade, which was conducted between 2017 and 2020.

As a part of the EBRD's transition impact, the project is on track to achieve its benchmarks. In terms of the "Green" aspect, the project has contributed to the CO2 emissions savings from the additional new renewable capacity as well as the network loss reduction. From the "Resilient" perspective, the project has promoted local capital markets through the successful issuance of the series of Ignitis Group's green bonds.

PSD last updated

30 Sep 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

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 compliance@ebrd.com. 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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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