Acting as local counsel in Estonia through international law firm Dentons, we advised Deutsche Bank in connection with a syndicated loan agreement for a total of EUR 600 million to Eesti Energia.
International energy company
Eesti Energia is an international energy company whose home markets are the Baltic States, Finland and Poland. The group is engaged in energy production and sales, as well as offering useful and convenient energy solutions to customers. The group’s goal is to achieve carbon neutrality in electricity production by 2035 and in the entire group’s production by 2045.
Sustainability linked loan
On 15 February 2023, Eesti Energia signed a syndicated loan agreement for a total of EUR 600 million. The purpose of the term loan is to refinance the company’s bond and continue with the planned investments in customer solutions, the growth of connection opportunities in the electricity grid for micro-producers, and the development of the carbon-neutral chemical industry.
According to Hando Sutter, chairman of the management board of Eesti Energia, the loan agreement signed with 10 financial institutions shows that despite the energy crisis, financial institutions continue to support Eesti Energia. The financing was structured as a sustainability-linked loan and received an “aligned-good” rating from ISS Corporate Solutions.
“The proceeds from the financing, in addition to refinancing the bond, shall be invested in Eesti Energia’s solutions, with which customers can manage their energy use more intelligently and reduce their environmental footprint,” said Sutter. The group is also increasing its investments in the electricity grid to enable more micro and small producers of renewable electricity to connect to the electricity grid. Investments will also be channelled into the carbon-free chemical industry.
The loan will refinance a EUR 500 million bond expiring in September 2023 listed on the London Stock Exchange. The loan agreement was concluded for five years on the basis of a partial repayment schedule. The initial mandated lead arranger, sustainability coordinator and lead financier of the syndicated loan was Deutsche Bank.
Our services and project team
We advised the client on all local law matters throughout the transaction, including in relation to Estonian law aspects of a syndicated loan agreements as well as issuing a legal opinion on the transaction.
Our client team was led by counsel Jane Eespõld and associate Kamilla Alma Vilderson and also included partner Kätlin Krisak, partner Kaido Künnapas, counsel Kaspar Endrikson, senior associates Mari Agarmaa, Robin Teever and Verner Silm and associate Raul Kartsep.