Eesti Energia, Estonia's state-owned energy company, announced it has successfully raised EUR 400 million (USD 432.6 million) through the issuance of green hybrid bonds.
The funds are earmarked for ongoing and new green projects aimed at advancing sustainable initiatives.
The issuance, which saw a four-fold oversubscription, drew interest from nearly 200 investors worldwide, enabling Eesti Energia to secure a more favorable interest rate than initially anticipated.
Marlen Tamm, CFO of Eesti Energia Group, highlighted the strong demand, stating, “The exceptionally high demand allowed us to offer bonds at a lower interest rate than we originally planned.” The company finalized the offer with a coupon rate of 7.875%, tightened by more than 50 basis points during the bookbuild process, comparable to similar bond offers globally and domestically.
According to Eesti Energia, the hybrid bonds benefit from 50% equity content as assigned by Moody's and S&P, and will be treated as equity under IFRS accounting standards. The bonds are set to be listed on the London Stock Exchange.
Proceeds from the issuance will support eligible green projects aligned with the company's Green Finance Framework. These projects include investments in renewable energy, enhancements to the transmission network, and the installation of electric vehicle charging stations integrated with the Estonian grid.
