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 euros corresponds to 6.7 per cent of the company’s 175 million euros initial public offering (IPO). The shares will be listed on the Tallinn Stock Exchange and included in the NASDAQ Baltics Main List.
“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,” said Grzegorz Zielinski, Energy Europe Director at the EBRD. “This landmark transaction will contribute to the development of local capital markets and set an important benchmark for future listings and increasing market liquidity.”
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.
“Enefit Green welcomes the EBRD, as one of the leading regional long-term investors, to its institutional investor base,” added Veiko Räim, Chief Financial Officer of Enefit Green. “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 mutually beneficial cooperation.”
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.