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Energa intends to issue hybrid bonds

November 24, 2016

ENERGA SA is in the  process of raising financing from the European Investment Bank in the amount of up to EUR 250,000,000 as part of the European Commission’s Investment Plan for Europe, known as the Juncker Plan.

The said financing in the form of hybrid bonds will be slated for execution of an investment program in the distribution segment, consisting in modernization and expansion of the ENERGA Group’s distribution assets in 2017-2019. The estimate total amount of the capital expenditures in this period is approx. EUR 800,000,000.

To meet the increasing demand for electricity, the investment program is aimed at expanding, in particular, the required distribution infrastructure. In addition, the funds raised through the issue of hybrid bonds will be used to improve the reliability and quality of energy transmission, inter alia to reduce network losses. Additionally, the financing from the European Investment Bank will be earmarked for financing certain elements of the smart distribution network, such as smart meters.

Currently the ENERGA Group’s investment program subject to the financing is undergoing internal assessment by the European Investment Bank.

According to the plan, the hybrid bond issue financing agreement will be signed by ENERGA SA by the end of Q1 2017.

The financing in the form of the hybrid bond issue will be the third financing that ENERGA SA will obtain from the European Investment Bank. The previous two long-term investment loan agreements entered into in 2009 (PLN 1,050 m) and in 2013 (PLN 1,000 m) also financed ENERGA Group’s distribution assets expansion and modernization program.