€35 million loan to support Estonian oil shale company VKG

By Axel  Reiserer


The EBRD is providing a €35 million loan to the Estonian oil shale processing company Viru Keemia Grupp AS (VKG) to finance an environmental upgrade and energy efficiency improvements for its operations.

The funding will support a major investment programme by the company aimed at increasing its capacity to produce liquid fuels from oil shale through the construction of two oil production facilities. The EBRD loan will finance the construction of two fuel gas desulphurisation plants, a condensing steam turbine and a steam boiler and a lime kiln plant. These projects will contribute to the reduction of CO2 and SO2 emissions.

VKG was established in 1999 after the privatisation of the state enterprise Kiviter. The company has since evolved into a holding company, which includes a mine, an oil shale processing complex, heat and power generation stations as well as production of construction materials. VKG employs 2,200 people working in 10 subsidiaries.

Riccardo Puliti, EBRD Managing Director, Energy and Natural Resources, said: “With our loan we are strengthening energy security in Estonia by supporting initiatives to use the country’s own resources in a sound and responsible way. The EBRD is proud to support VKG in its pioneering efforts.”

Ahti Puur, Vice Chairman of the Board of VKG, added: “We see the support of the EBRD for our projects as an expression of the Bank’s satisfaction with the substance and the timing of our company’s development decisions.”

Today, the Estonian oil shale processing industry generates some 3 per cent of Estonia’s GDP. In addition to processing, VKG is also active in excavation and since 2010 has had its own source of oil shale, the Ojamaa mine, which is estimated to hold 58 megatonnes of mineable resources.

To date, the EBRD has committed some €500 million to the Estonian economy in more than 75 projects in the financial, infrastructure, corporate and energy sectors