Latvenergo will soon issue €1 billion in bonds / Article

Latvenergo said in announcing its decision to issue the bonds that the proceeds would be used for electricity generation using solar, wind and hydro power, electricity distribution and storage, and infrastructure construction.

Guntars Baļčūns, Latvenergo’s board member and CFO, said that according to the investment plans, the company needs to raise around EUR 300-350 million annually over the next three years. These funds are needed to finance the company’s development projects. The main areas of development are the construction of wind and solar parks, the modernisation of hydroelectric power plants and the development of a battery system.

Asked whether such a fundraising would not fall on the shoulders of taxpayers, who would have to pay it back in the future, Latvenergo’s CFO allayed fears, saying that on the contrary, it would stimulate economic development and imported electricity would be replaced by self-generated electricity.

“Essentially, the Baltics are now in an import position, where the price of electricity in the Baltics is higher than what we are seeing in Scandinavia – Finland and Sweden. These two countries are in an export position with a much higher proportion of renewable generation in the overall generation portfolio, and this results in lower electricity prices in these countries. This is one of our goals – to ensure that we are in an export position,” explained the Latvenergo representative.

According to him, this will not be a burden on the state budget at a time when austerity measures are being implemented.

The exact date of the bond’s trading cannot yet be given, but it will be in the near future. The bonds will be issued in series and each series may be issued in tranches. The specific terms of each tranche will be set out in the applicable final terms, which will be approved separately by Latvenergo.

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