Energy, EU – Baltic States, Legislation, Lithuania

The Commission has concluded that the proposed acquisition will raise no competition concerns because Fortum has a minimal presence in Lithuania’s markets for generation and wholesale of electricity. Therefore, the market share increment brought about by the transaction will be small and will not significantly alter the market structure.

Moreover, the joint venture will be a new competitor on the Kaunas district heating market.

The transaction had been examined under the normal merger review procedure, the Commission said in a press release.

With the transaction now cleared, a tender for a contractor to build the CHP plant will be issued by the end of the year.

In mid-October, Fortum Heat Lietuva and Lietuvos Energija signed an agreement on investment in the construction of a Kaunas CHP plant, worth an estimated 147 million euros.

Lietuvos Energija will own 51% of shares in the joint venture Kauno Kogeneracine Jegaine (Kaunas Cogeneration Plant). Fortum Heat Lietuva will own 49%, of which 5% may later be transferred to the local authority of Kaunas or a company controlled by the municipality of Kaunas.

As estimated, the initial minimum investment by Lietuvos Energija and Fortum will amount to 12.24 million euros and 11.76 million euros, respectively.

The new CHP plant will incinerate, annually, 200,000 tons of municipal waste and 11,000 tons of sewage sludge to generate approximately 500 GWh of heat and 170 GWh of electricity. Heat will be supplied to the city of Kaunas and its approximately 111,000 households and 3,500 organizations. As reported, the new facility will reduce CO2 emissions by approximately 65,000 tons per year and will also reduce the amount of waste sent to landfills.

Fortum has said that it has invested more than 2 billion euros in cogeneration plants in Finland, Sweden, Estonia, Latvia, Lithuania and Poland in the past several years.