Ignitis Group – attracted foreign equity investment to Vilnius CHP
Ignitis Group, a renewables-focused integrated utility, has has secured one of the largest foreign direct investments in Lithuania in the past few years. The Group has agreed with a Quaero European Infrastructure Fund III (QEIF III), a fund managed by Quaero Capital SA (Quaero Capital), to sell 49% stake in UAB Vilnius Cogeneration Power Plant (Vilnius CHP) managed by the Group.Under the terms of the agreement, the value of 100% of Vilnius CHP’s equity amounts to EUR 244 million. The value of 49% of Vilnius CHP’s shares acquired by Quaero Capital amounts to EUR 120 million. It consists of EUR 110 million fixed and EUR 10 million conditional (earn-out) payment, which depends on the successful results of Vilnius CHP. In total, the Group into Vilnius CHP has invested EUR 52 million into Vilnius CHP equity. The transaction is expected to be completed in the second quarter of 2026, subject to regulatory approvals from Lithuanian and Latvian authorities and other closing conditions. After the completion of the transaction, the Group will retain control of Vilnius CHP, holding 51% of the shares.
"The fact that we have attracted one of the largest foreign direct investments in Lithuania in recent years is the result of active and consistent work of the entire team. The capital raised during the project will allow us to continue actively investing in the development of green capacities and networks, while maintaining prices of energy, produced by Vilnius CHP, competitive and favorable for residents," says Darius Maikštėnas, CEO of Ignitis Group.
Sébastien Bourget, Managing Partner, Head of Infrastructure at Quaero Capital, said: “Vilnius CHP is one of the most efficient CHP plant in Europe and an essential energy infrastructure in Lithuania, providing heat to a significant proportion of the Vilnius population and supplying non-intermittent electricity to the national grid. It supports the diversion from biodegradable waste put into landfills and contributes to the replacement of fossil-fuel fired installations. We are proud to start this strategic partnership with Ignitis Group and reiterate our confidence in the strong fundamentals of Lithuania. This represents a unique asset for QEIF III“.
Simultaneously with this agreement, Ignitis Group has agreed to sell one share of Vilnius CHP to Miesto Gijos, which shall become a minority shareholder based on the cooperation agreement signed on 29 May 2017 between Vilnius City Municipality, Group (then AB “Lietuvos energija“) and Miesto Gijos (then AB „Vilniaus šilumos tinklai“).
The Vilnius CHP project was accomplished with Ignitis Group's own and European Union funds, as well as borrowed funds from banks. The European Commission (EC) has allocated EUR 138 million support for this project. The EC decision on granting investment aid for the construction of a high-efficiency cogeneration plant in Vilnius provided that the sale of 49% of Vilnius CHP's shares to a private investor should be started within six months from the completion of the power plant construction project. The construction project of the Vilnius CHP was completed on 23 May 2024.
Vilnius CHP, operated by the Group, is one of the most modern power plants of its kind in Europe, capable of producing electricity and heat simultaneously using waste or biofuel. Vilnius CHP can ensure about half of the annual heating demand of the city of Vilnius.
