Estonia’s biggest wind farm companies merge to become Nelja Energia

21st märts 2012

Estonia’s biggest wind farm companies Freenergy, Vardar Eurus and Nelja Energia have merged under the single name Nelja Energia, creating an energy company with a traditional management and ownership structure which will fully own and operate wind farms in Estonia, Latvia and Lithuania. The new structure will provide additional impetus for the completion of its power plants currently under construction, and for expanding into other areas of renewable energy, primarily the production of energy from biomass. 

Commenting on the merger agreement, which was signed in late January and reached full implementation today, Nelja Energia’s director Martin Kruus said that it represents a significant union in Estonia’s renewable energy field. “Whereas to date Nelja Energia has been running its wind farms based on management agreements with investors (Freenergy and Vardar Eurus), we’re a much bigger organisation now than we were when we started out, on just a handful of projects, so it makes no sense to run the company like that anymore,” he said.

Kruus explained that the merger has formed a company owning and operating 17 wind farms in the three Baltic States, in which all investment and management is centralised. This creates an organisation that is more viable and easier for creditors, investors and partners to understand. “In Estonia we’re planning to complete construction of our on-shore wind farms in Aseri, Paldiski, Kunda and Hanila, as well as our off-shore wind farm in north-western Estonia,” he said, adding that two further wind farms would be built in Lithuania and one in Latvia, plus two biogas plants in Estonia – another form of renewable energy with good prospects.

“In the coming years we’ll be investing 150 million euros in renewable energy in the Baltics, and on top of that there’s the value of the offshore wind farm we’re planning,” he said, confirming that the merger will not lead to any changes for Nelja Energia’s existing partners, since the company will continue operations with the same workforce.

In addition to Estonia, Nelja Energia has been operating in Lithuania since 2007 and in Latvia since 2008. Kruus sees future growth in renewable energy in Estonia’s southern neighbours rather than in Estonia itself. “What’s making the Lithuanian market so promising is the fact that the Ignalina nuclear power plant was closed in 2010, which has made the country an importer of electricity – and that means that developing domestic capacity is a priority,” he said.

Kruus explained that currently the total wind energy capacity in Latvia is six times smaller than it is in Estonia, as a result of which the outlook in the renewable energy field there is good. He added that taken together, wind energy, biogas, biomass and hydro energy as renewable sources of energy represent almost 15% of all electricity consumed in Estonia today, around 5% of which comes from wind energy.

Freenergy, Vardar Eurus and Nelja Energia are merging through an exchange of holdings: Vardar Eurus acquiring a holding in Freenergy, which is then merging (consolidating its investments) with Nelja Energia (which is consolidating its management), with the resulting company going under the single name Nelja Energia. The total volume of assets of the merged company is 335 million euros.

View structural changes taking place within the company