Nelja Energia (f. Freenergy)

Location:

Estonia

Project number:

38912

Business sector:

Power and energy

Notice type:

Private

Environmental category:

C

Approval date:

06 May 2009

Status:

Complete

PSD disclosed:

22 Jan 2009

Project Description

The EBRD is considering an equity investment of EUR 22.5 million in Freenergy AS (the “Company”) as part of a two-stage EUR 45 million capital increase, to fund the equity needs for development , construction and operation of the Company’s current portfolio of wind power projects in Estonia, Latvia and Lithuania. The Company may also use the proceeds to acquire and develop further wind farm projects in the Baltic States, Russia or the Eastern Europe. EBRD is proposed to take up to 35% stake in the Company.

Transition Impact

The investment will support the expansion of the renewable energy markets in the Baltic States through the development and commissioning of the portfolio of wind farms owned by Freenergy. By financing one of the largest and hence most visible wind farm portfolios in the Baltic States the EBRD’s investment will provide comfort to project developers and other private investors and will demonstrate confidence in the renewable legislation thereby solidifying the regulatory regime.

The Client

Freenergy AS is a company registered in Estonia and is governed by the Estonian Law. The Company is an investment holding vehicle for wind energy assets in the Baltic States and Eastern Europe. The Company’s wind farm assets are developed and managed by Nelja Energia OÜ which is an Estonian project management company partially owned by Freenergy.

EBRD Finance

Equity investment of EUR 22.5 million in Freenergy in two phases as part of a two-stage EUR 45 million capital increase, to fund the equity needs for development and construction of wind projects. EBRD to take up to 35% equity stake in the Company. The proposed exit strategy is an IPO or trade sale within 5 to 7 years, following commissioning of the Company’s existing wind farm portfolio.

Project Cost

Confidential.

Environmental Impact

Categorisation and due diligence undertaken: The project has been classified C/1. An environmental and social due diligence covering the Company’s corporate management systems and procedures as well as its wind energy portfolio has been undertaken by the Bank’s environmental specialist and an independent consultant. The due diligence consisted of a questionnaire, review of environmental studies and development documentation, meetings with the Company management as well as site visits to four operating wind farms and to seven wind farms, which are under various stages of development.

Impacts: Although the operation of wind farms provide significant environmental benefits in terms of renewable energy and, therefore, carbon reductions, the construction and operation of wind farms may have significant adverse impacts on the local environment and population, depending on the location of the wind farms. The key impacts are associated with avifauna, notably migratory birds, as well as amenity of local communities resulting from landscape changes, noise and vibration. The due diligence showed that these impacts are being or have been identified, assessed and mitigated through Environmental Impact Assessments (EIAs), inclusive public consultations, as required under national environmental law and permitting procedures. The potentially significant impacts of the Company’s operating wind farms are being monitored as determined in EIAs and planning and building permits. This includes periodic monitoring of impacts on migratory birds and bat populations as well as local flora.

Mitigation: Based on the due diligence, an environmental and social action plan (ESAP) has been developed to ensure that all projects are structured to meet national law, EU environmental standards and good international practice. Furthermore, given that the Bank’s proceeds will be primarily used for financing of future development of wind and other renewable energy projects in the Baltic Sea region, the Company will adopt and implement environmental and social due diligence procedures based on good international practice that will cover pre-acquisition due diligence, as well as EIA practice and public disclosure procedures.

Monitoring: The Bank will evaluate the Company's ongoing environmental and social performance by reviewing annual reports prepared by the Company environmental and social impacts and implementation of mitigation measures on operating wind farms as well as implementation of the due diligence procedures on new projects. The Bank’s representatives will also conduct site supervision visits to both existing wind farms and new projects, when deemed appropriate.

Technical Cooperation

None.

Company Contact

Mr. Kalle Kiigske
Member of the Board
Nelja Energia OÜ
Estonia pst 1/3
10143 Estonia
Tallinn, Estonia

Tel: +372 640 9099
Mob: +372 509 2660
Fax: +372 640 9093
Email: kalle.kiigske@4energia.ee

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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