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EBRD acquires minority stake in Estonia’s Enefit Green

By Axel  Reiserer

  • EBRD becomes a minority shareholder in Estonia’s Enefit Green
  • First share listing of a pure-play renewable energy company in the Baltic states
  • IPO proceeds to support renewable investments in the Baltic states and Poland

The European Bank for Reconstruction and Development (EBRD) has acquired a 1.5 per cent stake in Estonian company Enefit Green, underpinning the first share offering by a pure-play renewable energy company in the Baltic states. 

The EBRD’s investment of €11.8 million corresponds to 6.7 per cent of the company’s €175 million initial public offering (IPO). The shares will be listed on the Tallinn Stock Exchange and included in the NASDAQ Baltics Main List.

Enefit Green is a renewable energy company with a portfolio of wind and solar plants, combined heat and power plants, a pellet plant and a hydroelectric power plant across Estonia, Latvia, Lithuania and Poland.

Following the IPO, Enefit Green will remain majority owned by Estonia’s state-owned energy utility company, Eesti Energia. Eesti Energia's strategy envisages an increase in its production of renewable energy from 36 per cent to 43 per cent by 2023, as well as a cessation of electricity production from oil shale by 2030 and carbon neutrality by 2045. Enefit Green will be a key driver of its parent company’s strategic goals.

The IPO proceeds will be used to develop, construct and operate renewable generation capacity, including greenfield wind and solar farms, in the Baltic states and Poland.

The successful public listing reflects the firm’s strong corporate governance and the country’s implementation of sectoral reforms. It also demonstrates that capital can be raised successfully on local stock exchanges.

Grzegorz Zielinski, Energy Europe Director at the EBRD, said: “The EBRD is proud to support the first IPO of a pure-play renewable energy company and one of the first partial privatisations in the energy sector in the Baltic region. This landmark transaction will contribute to the development of local capital markets and set an important benchmark for future listings and increasing market liquidity.”

Veiko Räim, Chief Financial Officer of Enefit Green, said: “Enefit Green welcomes the EBRD, as one of the leading regional long-term investors, to its institutional investor base. The EBRD’s participation is an important contribution to the IPO and shows its strong support to our journey towards a greener and more sustainable future. We look forward to a mutually beneficial cooperation.”

The EBRD has been actively involved in the development of capital markets in the three Baltic states and, in 2018, together with the European Commission, sponsored the signing of a memorandum of understanding between Estonia, Latvia and Lithuania to create a pan-Baltic capital market to strengthen their economies and stimulate investment to create jobs.

The EBRD has been investing in the Baltic states since 1991. To date, its total investment in the region stands at €2.7 billion through almost 300 projects.

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