Energy, EU – Baltic States, Latvia, Legislation

In accordance with Latvian competition rules, the deal is subject to be supervision by the Competition Council, which means that a takeover report will be submitted to the competition authority.

The companies acquired by Fortum Latvia will continue to supply thermal power to Daugavas Siltumtikli municipal heating utility, providing 40% of the thermal power consumed by this southeastern Latvian city in 2018.

Information from LETA Archive shows that in the spring of 2017 lawmakers from Harmony party sought clarification from Economics Minister Arvils Aseradens (Unity), as they questioned the lawfulness of licenses issued to several Daugavpils combined heat-and-power plants for selling electric power as government-subsidized energy.

The power plants in question included BK Energija and Energy&Communication. The Harmony lawmakers had found out that in order to make the companies eligible for the licenses, they had been allowed to artificially increase their profit by EUR 1.763 million.

Last summer, Andrejs Elksnins (Harmony) who was then mayor of Daugavpils, asked his predecessor in this position Janis Lacplesis (Latgale Party) to lay down his mandate.

Members of the Daugavpils City Council were informed that Daugavpils Siltumtikli generates 49% of the energy necessary for the city, while the rest is purchased from private companies: BK Energija, Latneftgaz, Cefus and Sprino.

Former Daugavpils mayor Lacplesis told LETA that he rejected Elksnins’ criticism, as thanks to the contracts with private companies, the heating tariff in Daugavpils had been cut by 6.8%.

Fortum is a multinational energy company, employing more than 9,000 people in the Baltic and Nordic countries, Poland, India and Russia. The company posted EUR 4.5 billion in 2017 sales. Fortum is listed on the Nasdaq Helsinki Stock Exchange (Nasdaq Helsinki).

Fortum has been operating in Latvia since 2007. Information available at Firmas.lv shows that Fortum Latvia belongs to the Dutch-registered company Fortum Holding B.V.

Fortum Latvia closed 2016 with a EUR 16,841,681 turnover and a profit of EUR 2,408,659.