Governance
Operational documents
EPSO-G, in carrying out its activities, aims to act correctly and comply with the requirements of state laws and international standards. All Group activities are regulated by operational policies. A complete list of publicly announced policies is provided below.
National security
The Ministry of Energy pays special attention to the resilience of critical infrastructure. The expectation is set for strengthening the protection of physical and cyber infrastructure. Considering the military and hybrid threats in our region, it is planned to implement drone detection systems, physical barriers, strengthen cybersecurity, and ensure the availability of human and material reserves.
The role of “EPSO-G” in ensuring national security is also emphasized – the Group is already participating in the implementation of the Lithuanian and German artillery factory project in Baisogala. It is expected that the Group will demonstrate leadership and expand its activities and expertise in the defense industry by investing in security and defense industry projects that are significant for the state and align with national interests.
International connections and networks
One of the key projects is the implementation of the “Harmony Link” electricity connection with Poland. It is also aimed at strengthening the intersystem electricity connections between Lithuania and Latvia and making a decision regarding the implementation of the marine connection with Germany, the “Baltic Hub”, and the conditions for project execution.
The expectation is raised to increase international gas flows from the Klaipeda liquefied natural gas terminal towards Central Europe and Ukraine. It is also planned to ensure measures for the development of the pure hydrogen network in the Nordic and Baltic countries and the implementation of hydrogen development.
These projects are important not only for achieving greater integration with the European Union (EU) electricity and gas markets but also for strengthening system reliability and creating conditions for the development of renewable energy resources (RES), green transformation, and increasing the country’s competitiveness.
Energy green transformation and system flexibility
It is planned that by 2028, electricity generation capacities based on RES in Lithuania will reach at least 8 GW, therefore the “EPSO-G” group must strive for leadership in integrating RES generation capacities and managing energy flows. The Group will actively seek to ensure optimal development of transmission infrastructure, sector integration, and flexibility of the electricity energy system. Dynamic transmission tariffs will also be evaluated, and the geological structure of Syderiai will be analyzed to assess long-term energy storage possibilities.
The Ministry of Energy expects that “EPSO-G” will actively contribute to the development of green gas infrastructure, utilizing existing natural gas infrastructure for biogas development and creating a new green hydrogen ecosystem. It is also expected that the Group will conduct studies to assess the possibilities of hydrogen, synthetic green gas, and CO₂ transportation, provide proposals, and make decisions that create the highest added value for Lithuania.
Financial expectations
The Group’s adjusted average return on equity must not be less than the indicator set by the Government. The return on investment must be no less than the average return on investment of mature economies in Western Europe, allowing not only to maintain the technical condition of the managed infrastructure but also to create opportunities for system development and the attractiveness of energy transformation investments.
The Group must maintain an investment credit rating of no lower than Baa2 according to Moody’s or equivalent levels used by other credit rating agencies. The ratio of the Group’s net debt to adjusted EBITDA must not exceed 6 times in the medium term and 5 times in the long term.
The Group must maintain a consistent implementation of its dividend policy, and the level of dividends paid by the Group must not be less than that set by the Government. “EPSO-G” must strive for the maximum level of dividends in subsidiaries and associated companies and prioritize the use of financial flows for funding strategic investments or projects.
Principles of Group operations and sustainability
The Group must conduct its activities according to the highest standards of transparency, governance, ethics, and social responsibility. The company’s activities must be based on good governance practices as provided by the laws of the Republic of Lithuania, international recommendations (OECD), and other best global practices.
The Group must adhere to a sustainable development and good corporate governance policy in its operations. The company must consistently implement its commitment to achieve a net zero GHG emissions balance by 2050 and contribute to the implementation of the United Nations sustainable development goals.
The Group must transparently provide support and humanitarian aid, primarily focused on cooperation with scientific and educational institutions to promote energy professions and provide humanitarian assistance for the restoration of Ukraine’s destroyed energy infrastructure.
Policies, guidelines and codes
The operational policies of the “EPSO-G” group are documents designed to consistently and effectively implement the organization’s management system. This system helps employees transparently and efficiently achieve the goals set in the operational strategy, creating value for the country’s people and businesses. To ensure their effectiveness, the companies of the “EPSO-G” group prepare an annual report on the progress of implementing operational policies for the management company’s board.
7.Partners’ Code of Ethics
The companies of the “EPSO-G” group are responsible for the smooth implementation of strategically significant energy projects for the Lithuanian state, following the highest standards of environmental protection, business ethics, transparency, and employee health and safety. Aiming for greater progress in the field of sustainability, the “EPSO-G” group encourages all its partners not only to comply with the law but also to adhere to the principles set out in the “EPSO-G” group Partners’ Code of Ethics, which will serve as the basis for constructive cooperation.
We invite you to report violations of the Partners’ Code of Ethics to the “EPSO-G” trust line
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8.Sustainability
The objective of the EPSO-G Group’s sustainability policy is to ensure that the principles of environmental protection, social responsibility, and good governance are consistently integrated into the Group’s strategy, risk management, investment decisions, infrastructure planning and development, and operational processes.
This policy establishes the general principles for the Group’s sustainability management and covers the areas of environmental protection, social responsibility, and governance—including climate change, pollution prevention, the circular economy, biodiversity, occupational health and safety, equal opportunities, employee engagement, communities, the supply chain, transparency, and accountability.
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9.Transparency and communication policy
EPSO-G is a state-owned group of companies, therefore it adheres to the principle that reliable, comparable, and timely public information and open internal communication dissemination strengthen oversight and operational discipline. This encourages more efficient work, proper management of operational and project implementation risks, and the creation of a good business reputation for the organization.
EPSO-G’s transparency and communication policy is designed to help communicate more effectively with each other and with external stakeholders: the public, shareholders, market regulators, etc.
In this policy context, the concept of transparency is used as EPSO-G’s commitment to publish information in an understandable and accessible form, which would provide stakeholders with a reliable basis for assessing the organization’s performance results and development prospects.
It regulates the scope of information published publicly and within the company, the principles of preparation, and responsibilities.
10.Purchasing policy
The activities of “EPSO-G” and the success of implemented projects depend on the transparent and fair procurement of goods, services, and works. The procurement policy of the corporate group aims to follow the best practices of international organizations, European Union institutions, and other purchasing organizations and entities, ensuring an efficient, dynamic, and transparent procurement process that creates added value for the achievement of the goals of the “EPSO-G” corporate group. The execution of procurements is primarily based on transparency, ethical behavior, equality, promoting competition, and proportionality, enhancing the transparency of procurement processes and strengthening anti-corruption measures within the group.
The group companies, while conducting procurements, also aim for the following goals:
- economic benefits and operational efficiency. This means that in procurement activities, ways are sought to reduce the costs and execution timelines allocated for procurement procedures without undermining the principles discussed in this section. The costs of procurement execution should not exceed the value of the procurement;
- sustainability of procurements and ongoing activities. This means that decisions related to needs and procurements are made considering the potential impact on the environment, society, respect for human rights, ethical behavior, and ensuring safe working conditions;
- strengthening the procurement process for strategic energy infrastructure projects and managing associated risks. The group companies implement projects that have significant strategic importance not only for the group but also for the group’s shareholders. Therefore, additional measures are taken to manage procurement-related risks;
- sharing procurement practices and experiences, sharing best practices, and expert specialization. The group seeks benefits and synergies by preparing coordinated procurements and implementing various efficiency-enhancing measures in the procurement field. Responsible individuals share their experiences and proven best practices, optimizing the activities of companies and their individual experts and increasing the value created within the group.
11.Interest management policy
The goal of the EPSO-G group interest management policy is to establish an effective interest management system operating within the Group, which allows potential conflicts of interest for employees, board members, and committee members to be identified in a timely manner and resolved effectively, thus ensuring the transparency and objectivity of the decisions made within the Group.
12.Support and humanitarian aid policy
The “EPSO-G” support and humanitarian aid policy establishes the main principles for the allocation of support and/or humanitarian aid, essential criteria, and requirements for the transparency and publicity of the provided support and/or humanitarian aid.
Support is granted to targeted groups in society, their activities, and initiatives that align with the Group’s company values, sustainable business principles, and strategy. Support may be allocated for educational activities, scholarships for students studying under university or other higher education programs closely related to the activities of the Group’s company, or other forms of sponsorship.
The Group’s companies encourage employees’ voluntary and unpaid involvement in such activities.