Lietuvos Energija Green Bond

Location:

Lithuania

Project number:

49433

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Target board date:

05 Jul 2017

Status:

Signed

PSD disclosed:

13 Jul 2017

Translated version of this PSD: Lithuanian

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

Good.

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

LIETUVOS ENERGIJA UAB

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 lowcarbon 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

None.

Company Contact Information

Jonas Rimavicius
jonas.rimavicius@le.lt

Business opportunities

For business opportunities or procurement, contact the client company.

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