Good practice:

Green Bonds issued by JSC “Latvenergo”

In June 2015, the largest electricity trader in the Baltic States, JSC Latvenergo, launched its Green Bonds programme to support climate change mitigation projects, becoming the first state-owned company in Eastern Europe to issue Green Bonds. Eligible projects include projects that target mitigation of climate change, incl.:
- Renewable energy – new capacities and reconstruction of the existing capacities of renewable energy - hydro, bio energy, wind and related infrastructure
- Energy efficiency – construction and reconstruction of transmission and distribution networks to decrease network losses and provide possibilities to connect renewable energy; smart grid projects
- Environment preservation – flood prevention, waste and water management
- Sustainable environment (max 10% of bonds issued) – environmental research and development, programs related to nature conservation and biodiversity
The proportions of investments made are following: renewable energy - 48%, energy efficiency - 34%, environmental protection - 18% and sustainable environment – 0,1%.
Green Bonds are issued for a 7-year period and listed on the Nasdaq Riga AS Baltic Bond List. According to the coupon payment as of June 2018, investors by regions of origin are Latvia (63%), Estonia (29%), Lithuania (3%) and Belgium (3%), Sweden (1%) and Luxemburg (1%), whereas investors by type are pension funds – 76%, asset managers – 9%, banks – 6%, insurers – 5%, individuals – 3%, and other.

The first Green Bonds issue in June 2015 amounted to 75 m EUR. In April 2016, additional Green Bonds amounting to 25 m EUR were issued. Nominal value per bond – 1,000 EUR. In total 100,000 bonds issued. Bonds’ listing date – 01.07.2015., maturity date – 10.06.2022.

On 07.06.2018, Moody’s reaffirmed the highest grade – GB1 (excellent) – rating for Latvenergo Green Bonds, that have also been assigned the Baa2 rating with a stable outlook. JSC Latvenergo was recommended for its transparent and well-considered decision-making process, transparent and comprehensible management of Green Bonds funding and effective reporting and disclosure practices.
Seven projects funded, incl. Reconstruction of Daugava Hydroelectric Station hydro aggregates (47,9 m EUR).

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Focus on energy production by RES efficiency improvement. The largest energy producer JSC “Latvenergo” invests significant financial resources to improve energy production efficiency by using new equipment and advanced technologies.

Energy production efficiency improvement financing by Green Bonds. The largest energy producer JSC “Latvenergo” provides an opportunity for investors to invest in company’s Green Bonds, thus contributing to investors green portfolio and corporate social responsibility.