New energy investments in Latvia

NIB and Latvia’s power utility Latvenergo A/S signed a new loan agreement on 20 October. The new loan has a 15-year maturity and totals EUR 50 million.

Latvenergo will use the financing for a three-year investment programme which includes modernising the generating capacity of the company’s combined heat and power (CHP) plants in Riga and hydropower plants on the river Daugava. To improve energy efficiency and supply quality, Latvenergo plans to replace 760 kilometres of overhead distribution lines with underground cables. The investment programme is also aimed at cutting NOx emissions from a CHP plant and reducing the risk of harmful substance leakage from transformer stations.

“This project is a important milestone in the development of NIB’s operations in Latvia, which became a member country of the Bank in 2005. A part of this loan is being provided in the framework of NIB’s Climate Change, Energy Efficiency and Renewable Energy loan facility, CLEERE. The facility was launched earlier this year to bring economic, ecological and social benefits to our member countries and to the entire Baltic Sea region,” says Johnny Åkerholm, President and CEO of NIB.

CEO of Latvenergo, Karlis Mikelsons, comments on the impact of the loan: “This investment programme will give us more leverage to stabilise the energy market in Latvia, which to a large extent depends on external power supply. This will obviously help increase the competitiveness of the company and the country in the region. We are pleased to be able to borrow from an international financial institution such as NIB.”

This is NIB’s fifth loan to the Latvian power utility, which is by far the Bank’s largest customer in the Baltic countries. The start of the cooperation between NIB and Latvenergo dates back to 2002.

Latvenergo is a state-owned joint stock company providing electricity transmission and distribution as well as power and heat production in Latvia. Hydropower makes up 65% of Latvenergo’s electricity production.