The construction contracting company Eternia Solar, part of the regionally leading international renewable energy development group Sun Investment Group (SIG), has successfully completed the first tranche of its short-term bond issuance. Instead of the planned EUR 3 million, the company raised EUR 4.4 million, which will be used to finance the construction of a 120 MW solar power plant project in Poland. This is the first stage of an up to EUR 8 million bond program.
“The higher-than-expected investor interest and the funds raised will allow us to ensure smooth and efficient implementation of one of the most important projects in our portfolio,” says SIG CEO Deividas Varabauskas.
The issuer will exercise the right to increase the size of this tranche to EUR 4.4 million and fully satisfy demand.
The bonds are scheduled to be redeemed within 12 months, using the long-term project financing provided by international institutional investors.
The annual coupon rate is 10%, paid semi-annually, and the bond redemption date is December 23, 2026. The placement was organized by the investment services company Orion Securities and legal matters were advised by law firm TEGOS.
More than half of the amount, EUR 2.5 million, was lent to Eternia Solar by investors from Lithuania. Investors from Estonia contributed EUR 1.2 million, and investors from Latvia EUR 700 thousand. Both retail and institutional investors participated in the offering.
“Short-term, bridge type bond issues provide investors with greater clarity while assesing investment related risks and sources of bond redemption. They are attractive because of their defined use of proceeds, and predetermined redemption mechanism. Confidence is further strengthened by the involvement of well-known institutional investors in the financing of energy project, the construction of which will be implemented using bond issue proceeds,” says Mykantas Urba, Head of Investment Banking at Orion Securities.
Project endorsed by strategic investors
The 120 MW project has been assessed and its long-term financing confirmed by international investors Berenberg and Amiral Gestion. They carried out comprehensive financial, technical, and legal due diligence and confirmed that financing will be provided in stages following the completion of construction works.
“For projects of this scale, institutional investors grant approval only after extremely rigorous assessment. Their decision once again confirms that the project is technically mature, sustainably structured, and fully compliant with international standards,” notes D. Varabauskas.
Construction of the project is already underway, all required permits have been obtained, contracts with contractors signed, and a significant amount of equity has been invested. Within 12 months of the bond issuance, the institutional investors’ funds allocated for settling payments with Eternia Solar for completed construction works will be transferred to the project owner and used to redeem the bonds.
One of the region’s leaders
Sun Investment Group is one of the largest solar energy project developers in Central and Eastern Europe, operating under a vertically integrated model, from land preparation and permit acquisition to power plant construction, operation, and maintenance. The company has developed more than 200 MW of operational projects and is currently advancing a portfolio of over 3 GW across Poland and Italy.
“By working across various European markets, we aim to create long-term value, strengthen energy security, and accelerate the growth of renewable energy. The investor confidence allows us to reach these goals,” says the SIG CEO.