Energy, Estonia, Latvia, Mergers and take-overs

Aivars Tihane.

Aivars Tihane, chairman of Enefit, the Latvian subsidiary of Eesti Energia, did not comment the deal and pointed out that Eesti Energia's CEO Sandor Liive will visit Latvia next week and provide official information about the deal and Eesti Energia future plans in Latvia, informs LETA.

Eesti Energia has increased its influence at Enefit Power&Heat Valka by increasing its share capital from LVL 100,000 to LVL 250,000. Eesti Energia bought the company from the Netherlands' company "Host Energy", which previously owned 75% of Enefit Power&Heat Valka shares. The other owner of Enefit Power&Heat Valka is Valka Town Council, which now holds 10% of shares.

"Eesti Energia makes use of the business opportunity to invest in a profitable project in Latvia. Even though the company is not large, it within the electricity purchase support scheme, and therefore it cannot be considered a rival to Latvenbergo. Latvenbergo does not invest in such projects here in Latvia or in other Baltic states, we focus on production of large amounts of electricity," said joint-stock power utility Latvenbergo board member Uldis Bariss.

The former chairman of Latvenbergo board, Karlis Mikelsons, believes that Eesti Energia, by purchasing renewable power stations, is trying to improve its energy balance, since electricity in Estonia is produced from shale, which involves environmental pollution.

"The purchase of one company does not mean that Eesti Energia has started an expansion in Latvia", added Mikelsons.