OREANDA-NEWS. Continuing its successfully started operations on the securities market, Latvenergo AS will carry out a public bond issue for a total nominal value of up to EUR 100 million. The bonds are planned to be listed on the Nasdaq OMX Baltic Bond List.

Given the fact that Latvenergo Group’s investment programme provides for implementation of several projects revolving around green thinking and that the securities market has seen investors’ demand and interest for such projects, Latvenergo has decided to issue green bonds. The main requirement for green bonds is the use of the proceeds raised in the issuance process only for projects relevant to green thinking and related to renewable energy sources, improved energy efficiency and sustainable environment. The funds raised would be directed to green-minded projects financed or partly financed by Latvenergo Group that concern production as well as distribution and transmission network assets.

To issue green bonds, Latvenergo AS has developed and approved the Green Bond Framework. The company`s approach to the selection of suitable projects and inclusion of environmental objectives in investment projects has also been assessed by an external party – CICERO (Center for International Climate and Environmental Research - Oslo), which has recognized the proposed approach as progressive, clear and relevant to ensure the achievement of environmental goals. Furthermore, CICERO has given a positive assessment of the proposed governance to ensure the selection of projects and reports to investors. CICERO has not identified any shortcomings in the approach proposed by us and consequently graded it as Dark Green, which is the highest possible assessment in the field of environment. The Green Bond Framework and CICERO opinion are enclosed with this release.

Latvenergo Group’s investment programme for the next few years provides for implementation of several projects revolving around green thinking, such as the ongoing reconstruction of the Daugava HPPs.

Zane Kot?ne, Member of the Management Board of Latvenergo AS, Chief Financial Officer: “Latvenergo AS has an ambition to be the first state-owned company in Eastern Europe to issue green bonds, as the Group’s operation is targeted consciously at environmentally friendly production and other activities.”

By issuing green bonds, the company also provides an additional opportunity for investors, encouraging them to become open investors and take pride in their financial support for environmentally friendly projects. Foreign experience shows that funds that have invested in green bonds indicate this fact in their sustainability reports, thereby enhancing the visibility of Latvenergo.”

At the same time, the additional benefit of green bonds is the opportunity to attract a broader range of investors, thus diversifying the sources of funding even further. It is essential that the issue of such bonds complies with Latvenergo’s activities and efforts related to environmental protection, strengthening the image of Latvenergo as a green-minded company.

Uldis Bariss, Member of the Management Board of Latvenergo AS, Chief Commercial Officer: “Our investor base has been very extensive, demonstrating a successful start on the securities market, as well as the fact that investors see our bonds as a good way of investment. The investors include insurance companies, pension funds, banks and asset managers. I would particularly like to emphasize the fact that more than 10% of those holding the first bonds issued by Latvenergo are private individuals.”

M?ris Ku?ickis, Member of the Management Board of Latvenergo AS, Chief Operating Officer: “In 2014, European leaders have adopted a new environmental and climate policy by setting challenging targets for environmental improvements by 2030. Although Latvenergo’s current strategy has been defined until 2016, we consider ourselves as an important partner to enable the country to achieve the environmental and climate change goals. The planned green bonds are issued in order to attract funding for the projects that are important for the environment and that help Latvenergo contribute to national and European environmental objectives.”

The fact that the issue of the bonds has contributed to public tangible and verifiable improvement in terms of reputation and corporate governance is also confirmed by stakeholders.

“We are pleased that Latvenergo has decided on a repeat issue of public bonds on the Nasdaq Riga stock exchange to raise funds, thus continuing to strengthen its reputation and visibility on international financial markets and expanding investment opportunities for investors outside the Baltic region,” Daiga Auzi?a-Melalksne, CEO of Nasdaq Riga, says. “By carrying out a repeat issue of bonds, Latvenergo transmits a strong signal to businesses in Latvia and the Baltic States that the stock exchange may provide additional funding for faster development to transparent and well-governed companies with a clear and sustainable development strategy.”

The green bond concept has emerged relatively recently following the investors’ demand and efforts to contribute to environmental conservation and improvement. Issues in the format of green bonds have a stable tendency to increase significantly every year.

About the Group

Latvenergo Group is the largest power supply company in the Baltic States, operating in generation and trade of electricity and thermal energy, provision of electricity distribution services and management of transmission system assets. In 2014, the power plants of Latvenergo Group generated 3,625 GWh of electricity, of which 54% were produced from renewable energy sources. Latvenergo Group is the largest electricity trader in the Baltic States, with its market share reaching 35% in the Baltic countries in 2014. The total amount of electricity supplied to retail and wholesale customers in 2014 is 10,451 GWh. In issuing bonds, Latvenergo Group operates according to the Corporate Governance Principles and Recommendations on Their Implementation approved by NASDAQ OMX Riga AS, ensuring good and transparent corporate governance practices.