The proposed new investment facility is green bonds

The Lithuanian Ministry of Finance intends to distribute the green bonds issue for the first time in the domestic market. The funds would be used for renovation projects of apartment buildings. “We have the intention to try to spread the issue of green bonds on the domestic market. This is a new initiative by the Ministry, we have not done so yet, and if approved by the Government, we will try to develop it” – said A.Želionis, the representative of the Ministry of Finance. According to him, recently green bonds in Europe are becoming more and more widely used.

The bonds would be auctioned through the Nasdaq Vilnius Stock Exchange. The stock exchange Nasdaq Vilnius from 2018, May 3rd includes the issue of green bonds of the Government of the Republic of Lithuania on the Nasdaq Baltic Debt Securities List. This is the first issue of government securities in the Baltic States, the funds raised will be used to implement green projects. The duration of the issue of green bonds of the Government of Lithuania is 10 years, bonds are redeemed in 2028, May 3rd. The nominal value of one bond is 100 euros. The Government of Lithuania intends to use the funds raised to modernize the apartment buildings and improve energy efficiency and improve the ecological situation in Lithuania.

The funds received for green bonds would be lent to the Public Investment Development Agency. The Agency will use funds for renovation of apartment buildings, increasing their energy efficiency. Agency’s request for a total of EUR 68 million. The loans raised by the government on March 22 offer the Government to approve a 10-year loan. The interest on green bonds would be paid for it, plus 0.101% point. These funds would finance 156 apartment building modernization projects. The average value of one project is estimated at 464.3 thousand. The renewal period is 18 months. The modernization of apartment buildings is funded by the Lithuanian and EU European Regional Development Fund. State Enterprise „Lietuvos Energija“ last year distributed 10-year green bond issue with EUR 300 mln. denomination. 130 bidders from 25 countries became interested in the company’s bonds, their demand was almost EUR 1.4 bn.

The green bonds issued by the Government to Lithuanian investors is intended to increase the opportunities for Lithuanian capital market participants to contribute to the financing of green projects. Interest in green bonds is a rapidly growing and global process around the globe leads to this progressive trend and the formation of a green bond market in the country. This is the first issue of government securities of this type in the Baltic States. Listing of such bonds in theNasdaq Baltic region is a significant event for investors and the market in the development of green investments.

“Green projects will help solve environmental problems. And the main purpose of green bonds is to finance green projects. They have to address key environmental issues, such as climate change, depletion of natural resources, loss of biodiversity, air, water or soil pollution. Apartment renovation and increased energy efficiency will contribute to reducing CO2 emissions and heating costs. We believe that green bonds will further stimulate investors’ interest in the Baltic region“, – said EEAG Vice President A.Jurgelevičius