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.
25.Guidelines for scientific research and experimental development and innovation activities
The transformation of the energy sector encourages the companies of the “EPSO-G” group to tackle new challenges, improve existing processes, discover new technologies and methods, and enhance competencies in a constantly changing environment. The group, while creating climate-neutral energy infrastructure and aiming to ensure the reliable and safe operation of the integrated system, pays significant attention to research, experimental development, and innovation (R&D) activities.
In accordance with the “EPSO-G” group’s R&D procedure description, we implement the most innovative energy solutions and carry out pilot projects with the help of innovation projects. By collaborating with European and Lithuanian scientific institutions and businesses, we conduct research, studies, and testing, and support the culture of innovation within the Group to achieve efficiency and improvements in operations.
The directions of the “EPSO-G” group’s R&D activities:
- Climate-neutral energy transmission infrastructure. Adapting energy transmission infrastructure in transitioning to climate-neutral energy.
- Flexible and integrated energy system. Flexible and reliable system operation, electrifying other sectors and enabling flexibility capabilities.
- Partnership and service development. Customer orientation, operational efficiency, revenue growth, and collaboration with international partners.
- Sustainable organization. We implement sustainable development solutions in our operations and externally, ensuring long-term operational resilience.