In 2022 the Bank invested USD 45 million as an anchor investor in a bond issuance by Energo-Pro a.s., a leading independent hydropower plant operator and power distributor in the Black Sea Region. The bond issuance of USD 435 million is aimed to finance Group’s capital needs.
BSTDB is backing up Energo-Pro’s investment programme which envisages capital expenditures particularly in the rehabilitation and modernization of the electricity network in Bulgaria and Georgia for households and corporate clients, as well as connecting more clients to the electricity network. In addition, BSTDB will contribute to improving Energo-Pro’s environmental and social performance by strengthening group’s environmental and social management system and expanding it to more sites in Bulgaria, Türkiye and Georgia. This will be achieved by developing comprehensive Stockholder Engagement Plans, and by increasing the adaptability of its power generation to the impacts of the changing climate.
The 2022 BSTDB participation in Energo-Pro’s bond issuance builds on a long-established relationship: the Bank has been providing continuous support to Energo-Pro Group, first as an anchor investor at Energo-Pro Bulgarian subsidiary level and later at Group level, as outlined below.
In 2016 BSTDB originally invested EUR 40 million in the debut, seven-year, EUR 130 million, privately placed bond issued by Energo-Pro Varna EAD, to support investments in Bulgaria’s energy sector. This subscription was the first time when BSTDB acted as an anchor investor in a primary bond issue. The net proceeds of the bond were used by the issuer to finance the capital investment programme in the electricity distribution network in Bulgaria over the period of 2016-2023, as well as for repayment of its outstanding indebtedness. Company’s investment programme included the acquisition of existing energy infrastructure and equipment, reconstruction and new investments in development. Also, this operation facilitated the development and liquidity of the Bulgarian Stock Exchange – Sofia, as the bond was the largest private bond for the Bulgarian market. The bond was placed in Central Europe, in Austria, and predominantly in South-Eastern Europe. BSTDB investment raised the level of comfort for commercial banks, pension funds, asset managers, corporate treasuries, thus helping the company mobilize additional resources.
The issuer is the sole license holder for distribution and end-supply (regulated) in North-East Bulgaria and one of the three energy distribution companies in Bulgaria. The Company is also a leading free market supplier (non-regulated) for the whole territory of Bulgaria. About 99% of the electricity generated by the Group is from hydropower. It is a subsidiary of Energo-Pro A.S., Czech Republic, a highly reputable integrated energy company with long history in private electricity distribution, power supply and generation of electricity from renewable energy sources.
Later, in 2017, BSTDB participated, again as an anchor investor, with EUR 42 million in the EUR 370 million debut Eurobond issue of the parent company, Energo-Pro a.s.. Among other uses, the Eurobonds refinanced the Bulgarian bond issued in 2016 by Energo-Pro Varna EAD, the Bulgarian subsidiary of Energo-Pro a.s.. The Bank supported the energy group to centralize and streamline its financing and get access to international funding.
The Group has 20 years of experience in the energy sector and develops its business in four major countries: the Czech Republic, Bulgaria, Türkiye and Georgia, of which three are BSTDB Member countries, thus highlighting a strong development and regional cooperation impact of BSTDB support to the Group. The BSTDB financing leads to improved quality of electricity supply, better service, and increased living standards of the people in the region. Energo-Pro a.s. operates 34 hydropower plants in Bulgaria, Georgia and Türkiye and a gas-fired thermal power plant in Georgia. In addition, the Group owns and operates electricity distribution networks in Bulgaria and Georgia, serving over 2 million customers. It is the largest energy company in Georgia and the largest privately owned generator of renewable energy in Bulgaria. The company employs over 9,000 people. Energo-pro a.s, is rated BB- by Fitch with stable outlook and B+ by S&P with positive outlook.
