14 Jul 2017

NIB invests in Lithuania’s first green bond

On 14 July, NIB invested EUR 25 million in subscribing to Lithuania’s first green bond issuance made by the country’s leading energy company Lietuvos Energija.

NIB’s investment in Lietuvos Energija’s issuance has been made under the Bank’s EUR 500 million facility earmarked for green bonds issued in member countries to finance projects aimed at improving the environment and mitigating climate change, in conformity with NIB’s mandate criteria. With this facility, NIB aims to contribute to the development of the green bond market in the Nordic–Baltic region.

Lietuvos Energija’s ten-year-maturity issuance enjoyed a strong investor interest with the book building reaching nearly EUR 1.4 billion, which prompted the arrangers to increase the initially targeted size from EUR 200 million to EUR 300 million. The bond attracted 120 investors from 25 countries. According to Lietuvos Energija’s green bond framework, the proceeds of the issuance will finance the transition to low-carbon and climate-resilient growth and a sustainable economy, primarily investments in wind, waste and biomass energy production and improved distribution grid efficiency.

Lietuvos Energija’s green bond framework is in line with the Green Bond Principles issued by the International Capital Market Association and was given the highest possible classification by the Oslo-based Centre for International Climate Research CICERO in June 2017.

Lietuvos Energija’s issuance, arranged by SEB and BNP Paribas, is the first green bond in Lithuania and NIB’s first investment in a green bond issued in the Baltic countries.

State-owned Lietuvos Energija is the largest company in Lithuania’s energy sector. Its generation portfolio currently consists of a 1,055 MW reserve power plant and a combined cycle unit fired by natural gas, a 900 MW pumped storage hydroelectric plant, a 100 MW hydroelectric power plant, and 42 MW in wind parks. Two high efficiency waste-to-energy CHP plants are expected to become operational until 2020.

NIB is a recognised player in the bond market and a member of the Green Bond Principles Executive Committee. The Bank has been issuing its own environmental bonds since 2011.

Green bond investments