Baltic energy firms go on spending spree

16 August, Week 32, Issue 923

State-owned energy holdings Lietuvos Energija (LE), from Lithuania, and Eesti Energia (EE), from Estonia, have been acquiring smaller players in the Baltic region in a bid to build up their wind energy businesses.

Lietuvos Energija announced last week it would buy Lithuanian wind farm operators Vejo Vatas and Vejo Gusis from Stemma Group, a local real estate and clean energy investor. Vejo Vatas runs a 14.9-MW wind farm, while Vejo Gusis operates two 10-MW and 9.1-MW stations. Stemma announced in the spring it was seeking a buyer for its entire wind portfolio, which includes four farms with a capacity totalling 109 MW.

The deal will establish LE as the second largest producer of wind energy in the Baltic States, with a 9% market share. The firm first entered the sector in early 2016, with the takeover of Lithuania’s Eurakras and Estonia’s Tuulueenergia, the owners of 42.3 MW of wind output.

“Investing in green energy, including wind, is one of our key priorities,” LE spokesman Arturas Ketlerius told NewsBase Intelligence (NBI). “We expect green generation to account for half of our portfolio value by 2030.”

LE raised funds for the latest acquisition with a green bond sale in July worth 300 million euros (US$340 million). Ketlerius noted that the placement had attracted 115 investors from 22 states, with demand outstripping supply by four times.

“We want to capitalise on our high, BBB+ credit rating, which is the highest among other similar Baltic companies,” he told NBI.

Earlier this year LE also made a bid for Nelja Energia, another wind farm operator owned by Norway’s Vardar. But instead, the company is predicted to be acquired by EE, one of LE’s main rivals in the Baltic area.

Nelja owns 17 wind farms with a combined output of 287 MW across Lithuania, Latvia and Estonia, as well as minority stakes in biogas and cogeneration units. Through the takeover, EE will become the biggest clean energy producer in the Baltics. But the deal still requires approval from regulators in Estonia, which have said they will take their time in reviewing whether the acquisition breaches competition rules. EE has reportedly signed loan agreements worth 300 million euros (US$340 million) with three banks to pay for the purchase.

EE is looking to draw 40% of its electricity supply from renewable and alternative sources by 2021. Following the takeover of Nelja, the company’s annual clean energy output is slated to almost triple from 372,000 MWh last year to over 1 million MWh. EE’s current portfolio consists of four wind farms with 111 MW of capacity, three cogeneration plants, one hydroelectric power plant (HPP) and one solar array.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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