OÜ Utilitas and the City of Tallinn received a merger permit from the Competition Authority to establish a joint venture in the field of district heating, AS Utilitas Tallinna Soojus, and entered into share transfer agreements. 66.66% of the company’s shares are owned by Utilitas and 33.34% by the City of Tallinn.
The establishment of AS Utilitas Tallinna Soojus was also approved by the Tallinn City Council in June this year.
The Mayor of Tallinn, Mihhail Kõlvart, noted that the process of establishing a joint venture between the City of Tallinn and OÜ Utilitas has now been completed. “The joint venture will implement the agreed investment plan, with a strong emphasis on the development of an environmentally friendly district heating system. Tallinn wants to achieve carbon-neutral district heating as soon as possible, and this goal is also included in the Tallinn 2035 development plan,” explained Kõlvart. “In the joint venture, we can invest in wastewater and seawater heat pumps, which will help us bring the share of natural gas use below 10% of the total volume by 2027 at the latest, reducing our dependence on imported fossil fuels. In addition, we will replace all old non-pre-insulated district heating pipelines with modern solutions by 2035, as a result of which heat losses will be reduced to less than 10%.”
The strategic goal of the City of Tallinn is to ensure the availability of environmentally friendly district heating solutions and the functioning of vital services on the territory of the City of Tallinn, and for this, the district heating network must be constantly modernized, and the necessary large-scale investments made.
Priit Koit, head of the Utilitas Group, added that carbon-neutral district heating is more environmentally friendly and has a more stable price for customers. “Today, Tallinn has a modern district heating system, in which the share of local and renewable fuels exceeds 2/3. The sooner we further minimize the share of imported fossil fuels, the less dependent we will be on geopolitical risks, the impact of which on fuel supply and prices has been evident over the last few years. As a result of the work we have done over the years, we have significantly reduced our carbon footprint, and our goal is to make all of our company’s activities carbon neutral by 2030 at the latest,” Koit explained.
On 22 June 2023, OÜ Utilitas, the City of Tallinn and the new company to be established, AS Utilitas Tallinna Soojus, entered into a shareholders’ agreement and a share subscription agreement, according to which the City of Tallinn and OÜ Utilitas established a joint venture AS Utilitas Tallinna Soojus. Of AS Utilitas Tallinna Soojus shares, 66.66% belongs to OÜ Utilitas and 33.34% belongs to the City of Tallinn. The City of Tallinn made a non-monetary contribution to the new association with the shares of Tallinna Soojus and Utilitas, for its part, with the shares of Utilitas Tallinn. The joint venture is a holding company which manages investments in the Tallinn region. Utilitas Tallinn and Tallinna Soojus are subsidiaries of the newly established company. AS Utilitas Tallinn will continue to sell heat to district heating customers and heat tariffs will continue to be regulated by the Competition Authority.