Lietuvos Energija Green Bond

Location:

Lithuania

Project number:

49433

Business sector:

Energy

Notice type:

State

Environmental category:

B

Approval date:

05 Jul 2017

Status:

Signed

PSD disclosed:

14 Jul 2017

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 issue 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.

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: 60

The transition impact is derived from:

i. Demonstration of new innovative way of financing: green bonds are a relatively new financial instrument that provide for an alternative financing method for investments related to climate change mitigation and achieving other environmental objectives. Therefore, these instruments are a good way to diversify an issuers' funding base, as well as strengthening its resilience to financial market shocks.

ii. Setting standards of corporate governance: compliance with the Green Bond Principles requires issuers to comply with high standards of transparency, disclosure and integrity when issuing a green bond, especially in relation to the use and management of the proceeds of the bond, as well as project selection and reporting.

iii. Setting standards of business conduct: the investment will assist Lithuania to meet its EU renewable energy target and to decarbonise its economy.

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 specialists and it reviewed the issuer LE UAB's corporate environmental and social ("E&S") policies, management systems and existing operations, and specifically focussed on assessing the projects to be financed through the green bond issue. In compliance with capital market transaction rules and regulations, the ESDD was undertaken by reviewing publicly available information. EBRD also met with the LE UAB's green bond team to assess the Green Bond Programme.

The proceeds of the issuance are proposed to be used to finance the company's investments in wind energy, enhancement of efficiency of the electricity distribution grid, as well as energy production from waste and biomass. LE UAB's Green Bond Programme is aligned with Green Bond Principles, voluntary process guidelines that recommend transparency and disclosure and promote integrity in the approach for issuance of a Green Bond. The Green Bond Programme has also obtained independent second opinion and, based on the overall assessment of the project types that will be financed by the green bonds and governance and transparency considerations, it has received a "Dark Green" shading. This is allocated to projects that correspond 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. LE UAB when feasible will report on the expected and actual impacts of the projects included in its Green Bond Programme on its website.

Technical Cooperation and Grant Financing

None.

Company Contact Information

Ainė Riffel
aine.riffel@ignitis.lt

Implementation summary

Lietuvos Energija Green Bond (49433)

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

The EBRD loan 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 demonstrated a new innovative way of financing through the successful issuance of Ignitis Group's first green bond. The project also set higher standards in transparency, disclosure and integrity, especially for the project selection and the use of proceeds management. Lastly, the project contributed to more resilient network connecting more renewables into the grid, which ultimately decarbonises the Lithuania's economy.

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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