Enefit Green sells district heating businesses in Paide and Valka

29.11.2023

Valka cogeneration plant

According to the purchase and sale agreement signed today, Enefit Green sells the district heating businesses of Paide and Valka in Estonia and Latvia to the largest district heating company in Estonia, Utilitas. Consent of the Estonian and Latvian competition authorities is required for the transaction to enter into force.

“Our intention is to maintain the focus on Enefit Green’s strategic business of increasing the share of wind and solar energy in the Baltic States and Poland. We are already the largest producer of wind power in the Baltic States and have been expanding our solar production rapidly in recent years. We have a strong short- and long-term development portfolio, that we will focus on in the future. We would like to thank the teams in Paide and Valka for their contribution and we are confident that they will be a valuable addition to the Utilitas team,” explained Innar Kaasik, member of the board and head of production at Enefit Green.

“As the largest district heating company in Estonia, we see that both Paide and Valka fit very well into our portfolio with their district heating operations based on renewable fuels. They have been continuously invested in, are well managed and well maintained. It is a great pleasure to have the opportunity to serve these two cities in the future,” said Robert Kitt, head of Utilitas’ district heating companies.

In Paide, the transaction consists of a district heating enterprise whose assets include a cogeneration plant commissioned in 2015, a biomass boiler plant, a reserve boiler house and a solar park. The company employs 21 people and sells heat to 226 buildings. Valka’s district heating business includes a cogeneration plant built in 2012 and reserve boiler house. The company employs 10 people, and the heat is sold to the customers by the city of Valka. The value of the transaction is €15.8 million on a debt free and cash free basis.

Paide cogeneration plant

The transaction is subject to the approval of the Estonian and Latvian competition authorities. Nothing will change for the employees, customers, and partners of Paide and Valka district heating companies before the transaction officially takes effect. After the transfer of assets, the companies will continue their current activities as part of the Utilitas group. All services will continue to be provided and all employees of the companies will be transferred to Utilitas.

Enefit Green was advised by LHV as financial advisor, KPMG carried out financial due diligence and TGS Baltic acted as legal advisor in the preparation and execution of the transaction, while Utilitas was advised by Superia Corporate Finance and Triniti law firm.

Enefit Green is listed on Nasdaq Tallinn and has approximately 64,000 investors. Enefit Green is increasing its green energy generation capacity in order to increase the supply of affordable green electricity and strengthen Estonia’s energy security. The company is currently building five wind farms in Finland, Estonia and Lithuania with a total capacity of 525 MW and five solar power plants in Estonia, Latvia and Poland with a total capacity of 100 MW.

Utilitas is the region’s leading renewable energy producer and the largest district heating company in Estonia. Today, Utilitas already offers district heating services in eight cities: Tallinn, Maardu, Haapsalu, Rapla, Valga, Keila, Jõgeva and Kärdla. The company is moving towards carbon neutrality by building new renewable energy generation capacities in the region, investing in solar and wind energy in Estonia, Latvia and Lithuania, and implementing the first green hydrogen pilot project.