SEB bank has entered into a loan agreement with AS Augstsprieguma tīkls (hereinafter – AST) for the provision of financing in the amount of EUR 116.2 million and into an overdraft agreement for EUR 20 million.

The proceeds will be used by AST to refinance the liabilities of AS Latvijas elektriskie tīkli (hereinafter – LET) after the investment of LET shares into the share capital of AST. As a next step, it is planned to incorporate LET into AST by 31.12.2020. Thus, the multi-year process of taking over assets of AST from the AS Latvenergo Group has been completed. It was done with the aim of ensuring that the new management model of the electricity transmission system becomes operational on 1 July 2020.

Ints Krasts, Member of the Board of SEB bank: “This is a strategically important project not only for us as the leading corporate financier in Latvia, but also for the country as a whole, as AST has thus become an independent transmission system operator. We are pleased that it was our bank that was chosen to secure this important transaction, which is one of the largest financial transactions in the banking sector in recent times and which confirms that we are a reliable partner for our long-term client. In turn, as one of the largest market participants in the Latvian financial system, this transaction demonstrates that with our knowledge and experience we can provide support for nationally important projects aimed at the development of such important resources as the electricity transmission system.”

Varis Broks, the Chairman of the AST Board: “SEB bank is a long-term partner of AST and offered the best financing model to AST and Latvian electricity consumers. In addition, we highly appreciate the successful cooperation. The refinancing of the liabilities taken over from LET will allow AST implement the planned development projects more efficiently and will provide financial savings in the development of the transmission network.”

Since 2011, when member states of the EU were required to separate their transmission system operators from the historical electric power supply monopolies, AST has been fulfilling the functions of a transmission system operator, while the assets necessary for the operation of the system were leased from LET. In the process of reorganization, AST will also take over all LET liabilities. From the viewpoint of energy policy, this is a rational step in the operation of the system, including the development of the electric power market and its future integration in the EU.