The European Bank for Reconstruction and Development (EBRD) will invest EUR 20 mln into the BaltCap Infrastructure Fund (BIF), the investment fund announced.
The President of EBRD, Suma Chakrabarti, signed the agreement today during a ceremony held at the Ministry of Finance of Estonia in Tallinn.
With additional contribution from Citadele pension funds and existing investors, BIF has reached its hard cap of EUR 100 mln.
“We are pleased to support the BaltCap Infrastructure Fund with a sizeable EUR 20 mln investment. The fund will address the scarcity of infrastructure equity funding in the region and promote the private financing of crucial infrastructure in all three Baltic states. With the fund’s strong commitment to the climate change mitigation, the Bank’s support of the BaltCap Infrastructure Fund sets an important milestone in EBRD’s promotion of green agenda in the private equity industry,” said the EBRD President.
Estonian Finance Minister Toomas Toniste, welcomed the investment, saying: “We are proud to welcome this investment in the Baltcap Infrastructure Fund, the first infrastructure fund in the Baltics with the goal to catalyse private investors to finance infrastructure projects”.
“The fund’s investment strategy addresses the rising investment needs in the region in transport, energy efficiency, and renewable energy sectors. Last year, the new Estonian regulation for a new type of fund in the form of a limited partnership came into effect. This fund regime has been designed along the lines of the best qualities of limited partnership structures of various countries. We are glad more and more regional venture capital fund managers, including BaltCap, are using the new Estonian limited partnership type of fund,” Toniste said.
With EUR 20 mln equity commitment EBRD becomes the second anchor investor of the BIF together with European Investment Bank that contributed the same amount of investment last year.
“For us it was imperative to attract EBRD as one of the anchor investors of the fund, especially because of their institutional expertise and commitment to the growth of the Baltic region. We are humbled with the trust of our investors that put us in a unique position to provide unmatched long-term financing solutions for sustainable homeland infrastructure development,” said Sarunas Stepukonis, Partner of BaltCap Infrastructure Fund.
The BIF also receives an investment from Citadele pension funds increasing total amount of the fund up to EUR 100 mln.
BaltCap, the largest buy-out, growth capital and private equity infrastructure investor in the Baltic states, launched the BIF in July last year with the expected size of EUR 100 mln. The fund invests into transport, energy and social infrastructure development across Lithuania, Latvia, and Estonia.
Since the start of operation, the fund invested EUR 16 mln into 48MW biomass plant in Vilnius, Lithuania. The plant will be built and become operational by the beginning of 2019. According to estimations, the plant will generate nearly 10% of Vilnius’ heat demand. Last year the fund also acquired 75% of Anaerobic Holding shares for EUR 9.45 mln. Anaerobic Holding owns and operates three biogas plants in Latvia with a total installed capacity of 4.9MW.
Investors of the BIF include all of the largest pension funds of the Baltic states, a life insurance company, and international financial institutions. More than half of the funds are raised from the pension funds based in Lithuania, Latvia, and Estonia – it is the largest combined local pension funds commitment to the Baltics-focused private equity fund to date.
