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On the financing agreements for EUR 300 million concluded between AB “Ignitis grupė”, its subsidiary UAB Vilniaus kogeneracinė jėgainė and AB “Swedbank”

Ignitis grupė
Ignitis grupė

AB “Ignitis grupė” (hereinafter – the Group) informs that, after the approval of the Management Board of the Group, on 9 March 2023 its subsidiary UAB Vilniaus kogeneracinė jėgainė (hereinafter – Vilnius CHP) concluded a long-term loan agreement for EUR 220 million (hereinafter – the Loan) with AB “Swedbank” (hereinafter – Swedbank), and the Group concluded a credit line agreement (hereinafter – Credit line) for up to EUR 80 million with Swedbank. The Management Board also approved the Group’s takeover Vilnius CHP’s loan received from the European Investment Bank (hereinafter – EIB).

Out of EUR 220 million Loan granted by Swedbank, EUR 85 million will be used to finance the finalisation of Vilnius CHP biomass unit construction works, and the remaining EUR 135 million will be used to refinance Vilnius CHP’s loan granted by EIB, which the Group is taking over.

The Loan is concluded for a period of 10 years with a possibility to extend it for additional 5 years, subject to the consent of both parties. The Loan stipulates additional measures ensuring the fulfilment of obligations, including the pledge of property, plant and equipment and biomass inventory of Vilnius CHP and the pledge of Vilnius CHP's funds in Swedbank accounts. Additionally, the Group will issue a first demand unconditional guarantee (hereinafter – the Guarantee) for the duration of the construction of Vilnius CHP biomass unit until its commercial operations date, with a maximum payable amount of EUR 240 million. It must be noted that Swedbank will release the Guarantee after the conditions established in the Loan are fulfilled, but not earlier than by 31 March 2024.

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The total investments of Vilnius CHP, including the biomass unit, amounts to around EUR 420 million, out of which EUR 220 million will be financed with debt, around EUR 140 million – with EU CAPEX grant, and the remaining part with equity.

It is estimated that, after Vilnius CHP biomass unit completion, the plant’s total electricity capacity will reach 93 MW, and the heating capacity – 239 MW. Vilnius CHP waste-to-energy unit began its commercial operations in March 2021 and once the biomass unit is completed, the energy will be also generated from biomass. Currently, cold testing is being carried out in Vilnius CHP biomass unit, and active preparation works for hot testing is undergoing, while commercial operation date is expected in Q3 2023.

Meanwhile, the Group’s Credit line agreement of up to EUR 80 million with Swedbank, which is intended to finance the Group’s working capital needs, is binding and concluded for a period of 24 months. It does not stipulate additional measures to ensure the fulfilment of obligations.

The Credit line of up to EUR 80 million concluded by the Group will be used to partially refinance two credit lines of EUR 150 million each of the Group’s subsidiary UAB “Ignitis” concluded in 2022. After signing the Credit line agreement with Swedbank, the total amount of the Group's credit line agreements with banks will decrease by EUR 220 million to EUR 499 million (from EUR 719 million as of 31 December 2022). However, it will not have a negative impact on the liquidity of the Group due to the additional Loan of EUR 220 million, the EIB loan (EUR 135 million) transfer from Vilnius CHP to the Group and the decrease in the need for a short-term financing reserve because of normalized price levels at the end of 2022 and recovered temporary regulatory differences.

For more information, please contact:

Artūras Ketlerius
Head of Corporate Communications at Ignitis Group
arturas.ketlerius@ignitis.lt
+370 620 76076