Riga, 2014-07-30 15:04 CEST (GLOBE NEWSWIRE) -- To ensure electricity supply quality and reliability to customers in a high level as well as to maintain its competitiveness on the electricity market of the Baltic region, the Latvenergo Group implements significant investment programme in power generation assets and electricity networks infrastructure. The envisaged amount of the investment programme amounts to 250 million EUR per year on average and its implementation is partially financed by the borrowed capital. Latvenergo AS regularly receives borrowed capital to ensure timely the required financing for several year investment programme. The borrowed capital is sourced from commercial banks, international financial institutions and on the domestic capital market by issuing bonds.
Under the successfully launched bond issue programme in 2012-2013, Latvenergo AS has issued bonds with the maturity of 5-year and 7-year for the total amount of 105 million euros accounting for more than 10% of the total loan portfolio of 926.7 million euros. It was previously announced, that in case of the favourable situation in the capital markets, within the borrowing plans Latvenergo AS intends to continue the issuance of bonds under a new bond offering programme at the end of this year. To realize the plan in a timely manner, the preparation works have started for preparation of the planned bond issue programme.
Procurement of bank loans is also on-going. The selected type of procurement procedure – a negotiation procedure with publication of an invitation to participate – gives all parties interested (banks) equal opportunity to participate while allowing Latvenergo AS to source bank loans with optimal terms and conditions that are acceptable to all parties, at the most suitable price level. Within the framework of the procurement it is planned to commit borrowed funds in the amount of 150 million euros and with the maturity of 5 and 7 years.
In order to secure required financing for the implementation of investment programme for next years, in addition to the aforementioned funding plans, Latvenergo AS has commenced activities to source a new loan of 100 million euros from the European Investment Bank, which is a good opportunity to receive the necessary funding at a competitive pricing. The respective loan is intended for financing capital investments in the electricity distribution network over a 3-year period aimed at reinforcing and modernising an electricity distribution network in Latvia, as well as introducing smart meter infrastructure. The European Investment Bank has confirmed the granting the loan and currently the contract negotiations are taking place. If the contract negations are successfully concluded, a loan agreement between the European Investment Bank and Latvenergo AS will be signed.
Additional information:
Jānis Irbe
Group Treasurer
Phone: +371 67 728 239
E-mail: investor.relations@latvenergo.lv
About Latvenergo
Latvenergo Group is a pan-Baltic energy company, engaging in electricity and thermal energy generation and supply, electricity distribution services and management of transmission system assets. Latvenergo Group holds one-third of the entire Baltic electricity market, thus ensuring its leadership in the Baltic electricity supply. Latvenergo AS has been acknowledged as the most valuable company in Latvia for several years in a row. International credit rating agency Moody’s has assigned Latvenergo AS an investment-grade credit rating of Baa3/stable.
Latvenergo Group includes the parent company Latvenergo AS (electricity and thermal energy generation and supply) and its subsidiaries Latvijas elektriskie tīkli AS (management of transmission system assets), Sadales tīkls AS (electricity distribution), Elektrum Eesti OÜ (electricity supply in Estonia), Elektrum Lietuva UAB (electricity supply in Lithuania), Enerģijas publiskais tirgotājs AS (administration of electricity mandatory procurement process) and Liepājas enerģija SIA (electricity and thermal energy generation and supply), as well as Elektrum Latvija SIA (electricity supply), a subsidiary of Elektrum Eesti OÜ.