Strong interest in Latvenergo green bonds
May 7, 2021
Within the third programme for the issuance of notes Latvenergo AS has successfully placed seven-year green bonds of 50 million euro with a fixed annual interest rate of 0.5%. At the end of the placement period the investor demand had reached 229.8 million euro. The proceeds from green bonds will be invested in environmentally friendly investment projects. The independent research centre CICERO Shades of Green has rated the updated Latvenergo AS green bonds as Dark green, which is the highest possible rating.
Latvenergo AS has successfully placed green bonds of 50 million euro within the third bond offering programme. The investor interest or the total demand level reached 229.8 million euro at the end of the placement period, thus exceeding the planned issue amount 4.5 times.
“This is already the second programme for the issuance of notes under which we are issuing green bonds, and our aim is to invest in environmentally friendly projects. The high level of investor interest in green bonds confirms Latvenergo's strategy to further increase the use of renewable energy sources, which means more hydro, solar, and wind power. It also acknowledges society's wish to live in a sustainable environment”, says Guntars Baļčūns, Chairman of the Management Board of Latvenergo AS.
The green bonds of Latvenergo AS have received the highest possible rating of the independent research centre CICERO Shades of Green – Dark green. That indicates the compliance of the planned projects with long-term environmental protection and climate change mitigation objectives, as well as good governance and transparency.
“Sustainable operations of Latvenergo are important for every inhabitant of Latvia. Successful issuance of bonds enables the company to raise funding for further implementation of the green energy strategy and opens up new opportunities for investors to invest in the most valuable company of Latvia”, Daiga Auziņa-Melalksne, the Chairwoman of the Management Board of Nasdaq Riga emphasises.
The proceeds from already placed green bonds will be invested in the reconstruction of the Daugava HPP cascade, where the reduction in CO2 emissions has reached about 16,000 tons per year over the years of implementation of the programme; in energy efficiency – construction and reconstruction of distribution networks, smart network projects and development of low emission transport infrastructure; the reduction in CO2 emissions in the distribution system just from 2014 to 2020 is about 23,000 tons; in nature conservation and biodiversity preservation and protection – making and installation of artificial fish spawning nests in the Daugava River, cleaning of rivers of the Daugava River basin, study of migratory fish in the Daugava River, annual monitoring of white storks, etc.
The public offer was made in Latvia and Lithuania, the bond purchase orders were received from 24 different investors, including pension funds, asset management funds, insurance companies and banks in Latvia, Lithuania, Estonia, Finland and Sweden, and from international financial institutions – the European Bank for Reconstruction and Development and the Nordic Investment Bank.
At the end of the placement period, the yield to maturity was 0.543%. Bonds for a total nominal value of 50 million euro and with maturity on 17 May 2028 have been placed. The total amount of the bond programme is 200 million EUR, organised by Swedbank AB (publ) and Luminor Bank AS.