EIB lends Latvian energy utility Latvenergo €200 million loan to refurbish power-distribution network

This article is published in association with European Investment Bank.

• EIB lends Latvian energy utility Latvenergo €200 million loan to refurbish power-distribution network
• Project to make electricity supply more reliable for Latvian residents and businesses
• Financing also promotes renewable energy and climate action

The European Investment Bank (EIB) is lending Latvian energy utility Latvenergo AS €200 million to upgrade the country’s electricity distribution network. State-owned Latvenergo AS will use the EIB credit to make the electricity-distribution system both more efficient and more capable of delivering clean power.

This project, due to be completed by the end of 2026, will add digital features to the network, improve the dependability of electricity supply for the almost 1.9 million customers and contribute to the European Union’s fight against climate change.

“Modernising Latvia’s electricity-distribution network is important both for the climate and for energy security,” said EIB Vice-President Thomas Östros. “This project will significantly boost the reliability of electricity supply for the country and accelerate the integration of renewable-energy sources into the energy mix, paving the way for a sustainable and resilient energy future. The EIB is glad to be able to support Latvenergo in this transformative endeavour.”

The EIB’s financing offers Latvenergo favourable terms – including flexible disbursements and a longer duration – compared with market alternatives. The support is expected in turn to attract more long-term financing for Latvenergo and strengthen its green credentials.

The credit marks the seventh financing accord between the EIB and Latvenergo, highlighting their strong partnership.

“We are investing to promote energy sector transition to renewable resources and in modernisation of distribution network to make a significant contribution to the economy of the country,” said Guntars Baļčūns, Member of the Management Board of Latvenergo AS. “These targets require significant financial resources, and the EIB provides access to competitive funding that supports both business and climate objectives. Our successful cooperation with the EIB has continued for more than 25 years, and this loan will allow us to use the resources we invest in solar and wind parks more efficiently.”

The investment programme aligns with Latvia’s National Energy and Climate Plan for 2021-2030 and the EIB’s Energy Lending Policy. In addition to supporting climate action, it aims to promote economic, social and regional cohesion.

Background information  

EIB 

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, high-impact investments outside the European Union, and the capital markets union.  

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.  

All projects financed by the EIB Group are in line with the Paris Climate Agreement, as pledged in our Climate Bank Roadmap. Almost 60% of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.  

Fostering market integration and mobilising investment, the Group supported a record of over €100 billion in new investment for Europe’s energy security in 2024 and mobilised €110 billion in growth capital for startups, scale-ups and European pioneers. Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower than the EU average.

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Latvenergo

Latvenergo Group is one of the largest providers of energy supply services in the Baltic states, engaged in the generation and trade of electricity and thermal energy, and distribution of electricity. Since 1939, Latvenergo is the largest producer of renewable energy in the Baltics and one of the greenest electricity generators in Europe – approximately half of the electricity is generated in three large hydropower plants. They are complemented by modernized combined heat and power plants, where electricity is obtained from natural gas. The Group develops new green wind and solar energy generation capacities in Baltics and is also a leader in the field of electromobility services. All shares of Latvenergo AS are owned by the state and held by the Ministry of Economics of the Republic of Latvia.