The wind farms have a total capacity of 42.3 megawatts (MW) and will produce 136,000 megawatt-hours (MWh) of electricity per year, an amount that would meet the annual needs of households in the city of Klaipeda, Lietuvos Energija said in a press release on Thursday.
"It is the first wind power capacity of Lietuvos Energija and also its first investment outside Lithuania – in Estonia. We see the Baltic and Nordic energy market as one, and so we will continue the development in the region. Our wind power development plans are not limited to these two wind farms. We will evaluate other acquisition opportunities, as well as the development of our own wind power projects," Lietuvos Energija Chairman and CEO Dalius Misiunas said in the press release.
The acquisitions will give Lietuvos Energija a market share of up to five% both in Lithuania and in the Baltic countries. The company plans to increase its market share in Lithuania to 10% in the future.
The deals were financed by SEB.
"The total price of the two transactions is 28 million euros, adjusted for the financial indebtedness of the companies, the enterprise value/EBITDA (EV/EBITDA) multiple ranges between 9 and 10 times," Lietuvos Energija CFO Darius Kasauskas said in the press release.
"The transactions were to a large extent financed with borrowed funds, taking advantage of the beneficial borrowing terms and the sustainable balance sheet of Lietuvos Energija. Only one-tenth of the transaction value was funded from own resources. This will increase the investment's return on equity return, which is expected to exceed the 9% target set by Lietuvos Energy's strategy," he said.
Lietuvos Energija purchased 75% of shares in Eurakras, a local company that owns a 24 MW eight-turbine farm in the villages of Geisiai and Rotuliai II, in the district of Jurbarkas, and 100% of shares in Tuulueenergia, which owns an 18.3 MW six-turbine farm in Mali and Tamba, in Estonia.
The Baltic wind energy market, including both developed projects and those under development, is currently made up of wind power plants with a total capacity of around 860 MW.
Wind power plants with a total capacity of some 310 MW currently operate in Lithuania. Once all ongoing projects are completed, the total capacity would reach 500 MW.
