Strong investor demand shows potential for local project finance.
The European Bank for Reconstruction and Development (EBRD) has taken the role of anchor investor in a Latvian green bond issue, while also investing in a green bond issued by Raiffeisen Bank Romania.
Latvenergo AS, Latviaâs state-owned energy utility, has issued the first tranche of bonds under a âŹ200m green bond programme for an ambitious programme of projects to transition into a sustainable, modern electricity network and to upgrade Latviaâs hydropower plants.
The proceeds raised from the bond issuance will be used to integrate more renewable sources into Latviaâs electricity network, mainly in the form of solar and wind projects. The EBRD invested âŹ50m as anchor investor and the bond received a âdark greenâ rating â the most stringent category under which the Centre for International Climate and Environmental Research found it to correspond with a long-term vision of a low-carbon and climate-resilient future.
At the same time, the EBRD invested âŹ11m in a green bond issued by Raiffeisen Bank Romania, a subsidiary of Austriaâs Raiffeisen Bank International. The bond, which is the first green bond issued in Romania, attracted âŹ81m to finance environmental projects and was significantly oversubscribed among investors.
Mark Davis, EBRD regional director for Romania and Bulgaria, said: âThe EBRD remains at the forefront of efforts to strengthen Romaniaâs capital markets. Today we are pleased to back the countryâs first green bonds. This pioneering move by Raiffeisen will pave the way for the creation of more securities intended to support sustainability, as the strong market reaction indicates.â
The EBRD aims to become a majority green bank and dedicate more than half of its work to climate finance by 2025.
