Energy, Financial Services, Investments, Latvia, Loan

The subject of the procurement was divided into two parts. The first procurement part was for the conclusion of the loan agreements for up to EUR 100 million, with a 5-year maturity and with an option to extend it by 2 years, while the second part – for the conclusion of the loan agreements for up to EUR 50 million, with a maturity of 7 years. The selection criterion of bids – economically the most advantageous bid.

The winners of the first part of the procurement were Pohjola Bank Plc, Svenska Handelsbanken AB Latvijas filiale and SEB banka AS, while Pohjola Bank Plc and Swedbank were the winners of the second part.

"Although Latvenergo regularly ensures the borrowed funds in the form of bank loans, this procurement has caused historically the highest interest in the banking sector, receiving offers in the amount of EUR 530 million in total from nine banks of the region. Not only the activity of the banks, but also the financial terms of the submitted bids prove that the banks consider Latvenergo as a stable partner and indicate the banks trust in the performance of Latvenergo Group and its perspectives in these fluctuating market conditions,'' said Janis Irbe, group treasurer of Latvenergo.

The borrowed funds are intended for financing the capital investments into electricity generation assets and network infrastructure that are essential for ensuring a high-quality and secure electricity supply and maintenance of the competitiveness in the electricity market in the Baltic region. On average, the planned annual capital investment program is EUR 250 million, and the Group partially finances its implementation from the borrowed funds. Latvenergo regularly attracts the borrowed capital to ensure required funds in a timely manner for financing of capital investment program of several years, the company informs.

Currently, in addition to the procurement of bank loans, two planned processes for ensuring borrowed capital are ongoing - activities to source a loan in the amount of EUR 100 million from the European Investment Bank and preparation works for the bond issue program for an amount of up to EUR 100 million.

As reported, joint-stock power utility Latvenergo posted EUR 42.3 million in profit in the first half of this year, which is 47.3 percent more than in the first six months of 2013, as Nozare learned from the company.

Latvenergo Group's turnover in January-June this year was EUR 543.1 million.

The company sold a total of 4,591 gigawatt-hours of electricity to consumers in the Baltics – a 5% increase on the first half of 2013.