All agreed loans

Latvia. Latvenergo A/S

Date of agreement: 16 Dec 2019
Country: Latvia
Customer: Latvenergo A/S
Amount in EUR: EUR 100 million
Maturity: 15 years
NACE sector / loan type: Electricity, gas, steam and hot water supply
Business area: Energy and water

Project

The loan has been provided to finance Latvenergo Group’s electricity distribution network investment programme for the period 2019–2021.

The programme aims to increase the security of power supply and improve the quality of service through network renewal and digitalization.

The investments include changing the overhead lines to underground cables, replacing the old transformer points, rolling-out smart meters and other enhancements.

Latvenergo AS is a state owned power utility engaged in electricity and heat generation and trade and natural gas trade. The electricity distribution is operated by its subsidiary company Sadales tikls AS, the largest distribution system operator in Latvia.

Fulfilment of NIB's mandate

Productivity:

The investments are expected to improve various efficiency indicators.

The level of interruptions in the systems will decrease after the project’s implementation. This will ensure better security of supply and also provide some financial savings for the company, as the amount of staff and vehicles needed for carrying out repairs will decrease. Moreover, the roll-out of smart meters will decrease the need for manual monitoring, resulting in an improvement in service quality improvement for customers.

SAIDI (system average interruption duration index) indicates that the average duration of interruptions in the power supply per customer will decrease from 105 minutes in 2018 to 100 minutes in 2022. The share of smart-meters among consumers will increase from 49% to 95% by 2022.

The investments in distribution network are part of Sadales tikls’s wider efficiency enhancement programme. Although the company-wide enhancement programme covers other functional groups, the majority of the impacts are associated with the investments in the distribution networks.

Expected productivity impacts related to the investments:

  • Share of smart meters among consumers: 95% by 2022
  • System average interruption duration index: 100 minutes by 2022
  • Reduction in workforce: 810 full-time equivalent

Environment:

The investment programme will strengthen the distribution system and secure the supply of vital infrastructure.

The total distribution capacity in the network amounts to around 6,600 GWh per year. It is expected that the investments will enable the reduction of energy losses from estimated 4.60% in 2019 to 4.55% in 2021, resulting in annual energy savings of 3.3 GWh.

Expected environmental impacts related to the investments:

  • Energy savings: 3.3 GWh per year

Sustainability summary

No negative environmental or social aspects have been identified in relation to the project.

Press release

NIB finansē elektroenerģijas sadales tīkla modernizāciju Latvijā