EBRD, IFC support private sector involvement in district heating in eastern Europe

By EBRD  Press Office

Share this page:

The EBRD is helping to modernise the district heating sector and support environmental improvements in Estonia, Lithuania and Russia through private sector participation in the public heating sector.

The Bank is making an equity investment of up to €100 million in Dalkia Eastern Europe, a new regional holding company set up by Dalkia International SA, a leading energy management company and a subsidiary of Veolia Environnement.

Through this investment the EBRD will subscribe over the next three years to newly issued shares of Dalkia Eastern Europe. The International Finance Corporation (IFC), a member of the World Bank Group, is making a matching equity investment in the company.

The funds will be used to increase energy efficiency and the use of renewable energy in Lithuania and Estonia through partnerships with local municipalities and private power and heat companies as well as help expand Dalkia’s operations in Russia and other new markets including Ukraine.

Currently the company’s main operations in the region are in Estonia and Lithuania, where it manages the Tallinn and Vilnius heat distribution networks as well as a series of small regional distribution networks.

The newly set-up company has a strong pipeline of investments in the region, which will set higher standards of energy efficiency and performance in the district heating sector.

“The transaction will allow Dalkia International to expand its operations further east into new markets building on existing operations in the Baltic countries and start up operations in Russia. Given Dalkia’s track record in the sector, this investment will help to restructure and improve district heating services in the region, outlining the benefits of private sector participation,” said Jean-Patrick Marquet, EBRD Director for Municipal and Environmental Infrastructure.

The EBRD’s Municipal and Environmental Infrastructure (MEI) sector covers investments and services under the responsibility of local government (whether provided by public or private sector entities) and typically includes water supply, wastewater collection and treatment, solid waste management, district heating and public transport in urban areas.

Over the past five years the Bank has substantially increased its activities in the municipal sector and in 2010 it signed 38 projects, worth €507, million in 16 countries – more than double the 17 projects in seven countries that were signed in 2005. As of March 2011, the Bank’s MEI portfolio has grown to over 220 projects with a total value of €12.7 billion.

Share this page: