Infrastructure Archives

BaltCap acquired the second largest electricity distribution operator in Estonia

Jan 2024/in Infrastructure /by Laura Põldma

BaltCap Infrastructure Fund II (BInF II) completed the acquisition of VKG Elektrivõrgud and now owns 100% of the company. VKG Elektrivõrgud is the second-largest electricity distribution network operator in Estonia after the state-owned Elektrilevi. BaltCap sees the acquisition as holding significant potential for horizontal growth both with electricity and grid-based services.

VKG Elektrivõrgud is the second largest regulated distribution network operator in Estonia after Elektrilevi, which is state-owned. Its network operations in northeastern Estonia cover the towns of Narva, Narva-Jõesuu, and Sillamäe, as well as surrounding areas with ca 71,000 inhabitants and heavy industry. The annual volume of VKG Elektrivõrgud’s electricity distribution in 2022 was ca 250,000 MWh. The grid consists of 946 km of power lines and 374 substations at low, medium and high voltages.

Marek-Andres Kauts, Investment Director at BaltCap, said he is content that the deal has been closed, and now emphasis can be put on growing the business further. “We see potential for horizontal growth and synergy from expansion to other electricity and grid-based services. Examples are electric vehicle charging, renewable energy generation, energy storage solutions, as well as telecommunications and street lighting,” Kauts said.

“Ida-Virumaa is the industrial heart of Estonia, and electricity distribution services must be flexible and affordable to serve the needs of the region, including industry and retail clients alike,” Kauts added.

The management team of VKG Elektrivõrgud will remain the same and continue in their current roles, with Ivo Järvala serving as the CEO. New advisory board has been established for the company, including BaltCap Managing Partner Simonas Gustainis and Investment Directors Marek-Andres Kauts, and Kristjan-Mart Piirsalu.

BaltCap Infrastructure kicks off with integrating biodiversity into operations and appointing a biodiversity champion

Nov 2023/in Infrastructure /by Laura Põldma

BaltCap Infrastructure Fund, through its wind park investment Zvirgzdaiciu energija, participated in the Nefco’s Biodiversity Pilot Programme. The programme addressed the unprecedented loss of biodiversity and nature. The main aim was to test and develop suitable biodiversity solutions in collaboration with companies and set an example for nature-positive impact strategies among financial institutions.

During the pilot, BaltCap and other project partners participated in various workshops, peer-to-peer knowledge-sharing sessions and expert-guided discussions. During the journey, Nefco facilitated the companies with professional advising and backing from AFRY, an international engineering, design and advisory company driving sustainability. Through the diverse engagements, biodiversity initiatives for each participating organization were developed.

Here is a short overview of the main steps and learning points from the lens of BaltCap:

Firstly, our journey began with an exploration of the wind park operations’ dependencies and impact on nature through screening and materiality mapping. During the analysis, sectoral and geospatial data were analysed with ENCORE tool. For example, we elaborated on the diverse impacts and dependencies of the wind turbine construction throughout the value chain.

In a nutshell, it was concluded that BaltCap’s direct project operations (a) and those of the suppliers (b) for wind turbine construction have different impacts and dependencies on nature:

Most affected impact drivers:

‒Water use (a)

‒Water pollutants (b)

‒Solid waste (b)

‒Disturbances (b)

Most dependent ecosystem services:

‒Climate regulation (a)

‒Flood and storm protection (a)

‒Mass stabilization and erosion control (a)

‒Groundwater (b)

‒Surface water (b)

Secondly, we developed a biodiversity management plan to establish our agenda for avoiding and minimizing the effect on biodiversity coming from our business and investments, with a specific focus on wind park projects. The main aim of setting up the plan is to systematically approach biodiversity issues and implement relevant measures not to do harm to biodiversity. The central feature of the plan is a methodology for quantifying and evaluating the impact on biodiversity in the wind energy sector

Now we are ready to take action; main activities to be carried out:

Integrating calculations on biodiversity impact. We will improve our internal investment processes by adding the calculations of biodiversity impact to the investment process at the early stage of the Environmental Impact assessment.
Setting specific biodiversity KPIs allowing impact assessment and benchmarking. We set forth specific KPIs for wind projects to assess the biodiversity impact. As a practical step, we carry out a preliminary assessment of our new wind park investment.
Specific mitigation/avoidance plan for future wind farm projects.
Assigning a biodiversity champion. To better keep the biodiversity topic in the spotlight and integrate the new project-specific initiatives into our procedures, we plan to appoint the task to a team member dealing with ESG issues.

We are thankful to Nefco for launching the programme, AFRY for advising and backing, and other Nefco Pilot Programme participant companies for insightful sessions and experience sharing.

BaltCap to acquire the second largest electricity distribution network operator in Estonia

Oct 2023/in Infrastructure /by Laura Põldma

The newly launched €200 million BaltCap Infrastructure Fund II (BInF II) signed its first agreement to acquire full ownership in VKG Elektrivõrgud. VKG Elektrivõrgud is the second largest electricity distribution network operator in Estonia after the state-owned Elektrilevi. BaltCap sees the acquisition as holding significant potential for horizontal growth both with electricity and grid-based services.

VKG Elektrivõrgud is the second largest regulated distribution network operator in Estonia after Elektrilevi, which is state-owned. Its network operations in northeastern Estonia cover the towns of Narva, Narva-Jõesuu, and Sillamäe, as well as surrounding areas with ca 71,000 inhabitants and heavy industry. The annual volume of VKG Elektrivõrgud’s electricity distribution in 2022 was ca 250,000 MWh. The grid consists of 946 km of power lines and 374 substations at low, medium and high voltages.

Marek-Andres Kauts, Investment Director at BaltCap, says, “The BaltCap Infrastructure Fund II aims to increase the resilience of the Baltic and Polish economies. Electricity distribution is a critical infrastructure service, and further developing the grid in the Ida-Virumaa region serves this goal perfectly. Ida-Virumaa is the industrial heart of Estonia, and electricity distribution services must be flexible and affordable to serve the needs of the region, including industry and retail clients alike.”

Talking about growth plans, Kauts explains, “We see potential for horizontal growth and synergy from expansion to other electricity and grid-based services. Examples are electric vehicle charging, renewable energy generation, energy storage solutions, as well as telecommunications and street lighting.”

Ahti Asmann, Chairman of the Board of Viru Keemia Grupp, says, “Viru Keemia Grupp is a major chemical industry company that focuses on the development of industrial projects in Ida-Virumaa. A strategic analysis of the group conducted last year changed the positioning of regulated businesses in our portfolio. As a result, we sold the heating network last year, and the sale of VKG Elektrivõrgud is the next logical step in implementing our business strategy. We are pleased to have found a strong partner for this regulated business who is interested in its development. The signing of the agreement marks the beginning of the process, and we will continue to work together to successfully complete this transaction. In the meantime, we will continue to provide all customers with reliable network services and electricity solutions.”

The buy-side advisers in the transaction were TGS Baltic and Opinio Finance, and the sell-side advisers were Superia and Cobalt. The transaction value and other details have not been disclosed. The transaction is subject to competition clearance, and the deal is expected to be approved within 1–2 months.

About BaltCap Infrastructure Fund II
BaltCap Infrastructure Fund II aims to contribute to increasing the resilience of the Baltics and Poland. The 20-year fund focuses on investments in renewable energy generation, energy demand reduction, and social as well as transport infrastructure.

BaltCap launches €200 million successor infrastructure fund

Oct 2023/in Infrastructure /by Laura Põldma

BaltCap, the largest private equity fund manager in the Baltics, held the first closing of its €200 million target BaltCap Infrastructure Fund II (BInF II). The 20-year successor fund aims to contribute to increasing the resilience of the region with a focus on renewable energy generation, energy demand reduction, and social as well as transport infrastructure investments in the Baltics and Poland. The fund is an Article 9 fund under the EU Sustainable Finance Disclosure Regulation.

The new fund will continue the proven strategy of its predecessor BaltCap Infrastructure Fund I, with a goal of financing infrastructure projects with positive environmental and social impact. BInF II will primarily focus on investments in renewable energy projects such as wind farms, solar parks, and biomass and biogas plants. It will also continue to help local municipalities to increase the energy efficiency of their buildings as well as provide essential services, including establishing and renovating schools, public buildings, and other social infrastructure.

Simonas Gustainis, Managing Partner at BaltCap, explained that the new fund aims to further increase the overall resilience of the investment region. “The Baltic countries and Poland are facing an infrastructure funding gap of ca €250 billion over the next 7 years. With the backing of international institutional investors, BInF II will seek to address this gap and finance infrastructure projects that increase energy security and contribute to climate change mitigation.”

Gustainis adds that the current investment team of the fund is the most seasoned in the region with a proven “Design–Build–Finance–Operate” skill set across numerous infrastructure segments. To date, with all its investments, the first fund has avoided ca 450,000 t of CO2 emissions and has achieved several important milestones:

● Firstly, contributing to the accessibility of clean and affordable energy by developing ca 200 MW of new renewable energy capacity— 100 MW of biomass, 33 MW of wind, and 60 MW of solar capacity;
● Secondly, developing ca 19,000 m2 of energy-efficient education and community facilities with 1740 new study places, allowing local children to avoid commuting to faraway schools. Additionally, deep energy modernisation of ca 10,000 m2 of municipal infrastructure (schools, sports facilities, and other public buildings) has been carried out;
● Additionally, more than 2700 modern LED lighting fittings have been installed along more than 50 km of roads to increase the safety and security of residents.

The cornerstone investor of BInF II is the European Investment Fund (EIF). Investors contributing to the fund include EIF, Swedbank pension funds, SEB pension funds, LHV Pension funds and pension funds managed by Citadele group. “We are grateful to our investors for their re-upped commitments and highly appreciate their continued trust and confidence in our team and strategy,” said Gustainis.

“The EIF is delighted to join forces with BaltCap once more in its second infrastructure fund focused on clean energy generation and other sectors such as social infrastructure, sustainable transport and digital,” said EIF Chief Executive Marjut Falkstedt. “Backed by the InvestEU programme, the fund´s strategy is well aligned with EIB Group’s objectives of improving Europe’s energy security and accelerating the transition to green energy.”

“Managing one of the largest pension funds in the Lithuanian market, we are constantly looking for new opportunities to bring value as well as solid returns to our clients. At the same time, it is crucial for us and many of our clients that their funds are invested in a sustainable way aiming to reduce emissions and mitigate climate-related and other risks. This is where our investment goals and the investment strategy of BaltCap Infrastructure Fund II align. The fact that the newly launched fund is focused on local infrastructure projects and strengthening energy resilience in the Baltics brings additional benefits to the whole society,” said Tadas Gudaitis, director of UAB Swedbank Investicijų Valdymas.

“We believe that long-term profitability of sustainable pension funds is higher, catering to both productivity and societal values. This is why our investment in BaltCap fund was an attractive investment opportunity for Swedbank’s pension funds,” commented Age Petter, Head of Swedbank Investment Funds AS.

Zigurds Vaikulis, Chief investment officer at CBL Asset Management, Citadele group: “Renewable energy, energy independence of the region, was one of the key reasons why we decided to participate also in the second instalment of BaltCap infrastructure fund. But not the only one. In addition to the environmental aspects, the contribution that this fund could make to improving the quality of corporate governance of infrastructure projects in the region is also very important to us. Infrastructure projects are in many cases state and local government contracts and an actor like BaltCap certainly has the capacity, if not the obligation, to improve the overall transparency of this somewhat specific environment.”

“LHV pension funds have invested money through BaltCap private equity funds on multiple occasions and we are pleased to commit funds also to the latest BaltCap Infrastructure Fund II. Since this fund is an article 9 fund focusing on green infra investment opportunities that are difficult to gain exposure to through other listed equivalents then in addition to commitments from our biggest pensions funds, we were for the first time also excited to commit funds from LHV green pension funds’ product line,” said Joel Kukemelk, fund manager and member of the Management Board of LHV Asset Management.

BInF II is an Article 9 fund under the EU Sustainable Finance Disclosure Regulation, which means it has set sustainable investment as its objective.

BaltCap launches solar power plant in Latvia

Sep 2023/in Infrastructure /by Laura Põldma

A joint venture, PV Power Ltd, comprising BaltCap Infrastructure Fund, energy group AJ Power, and alternative investment fund manager AJP Capital, has invested EUR 4.6 million to inaugurate the largest solar power plant in the Latvian region of Kurzeme, located in the city of Brocēni. The total capacity of the solar park is 6.5 MW, which will generate more than 6000 MWh of green electricity per year. The electricity generated by the solar power plant will be used by SCHWENK Latvija, a leading building materials producer in Latvia, which has signed a long-term green energy supply contract at a fixed price and is the largest long-term green energy supply contract of its kind signed by a single company in Latvia.

By purchasing green electricity from the newly opened solar power station, SCHWENK Latvia is contributing to the achievement of climate goals and obtaining more predictable electricity costs in the long term. The electricity generated by the solar power plant will result in more than 1,600 tons of CO2 emissions being avoided and the company’s impact on the environment will be significantly reduced. The solar power plant covers a total area of more than 10 hectares and has 11 520 solar panels with a capacity of 6.5 MW.

Matīss Paegle, Partner at BaltCap Infrastructure Fund: “I am delighted that in less than 1.5 years since the inception of our joint venture aimed at advancing solar energy production, we are now inaugurating the first operational PV plant in Brocēni. Another four projects comprising 14.7MW are currently under construction in various cities across Latvia, all aimed at providing manufacturing companies with green energy at predictable long-term prices. Unlike numerous large-scale projects that are still in the planning, this one stands as a fully operational model that enables businesses to stabilize their electricity costs without the need for heavy investments in fixed assets, benefiting both enterprises and, indirectly, citizens who can enjoy more affordable and greener goods and services.”

Roberts Samtiņš, CEO of AJ Power: “Brocēni solar plant project is the largest developed by AJ Power up to now and serves an exemplary model of how companies can efficiently access renewable electricity for their production requirements. Prior to the start of construction, a contract was signed with SCHWENK Latvija for the purchase of green electricity. This demonstrates both confidence in the AJ Power team’s experience and a clear, sustainable vision for the company’s development. I am confident that more and more companies will follow SCHWENK Latvija’s lead.”

“The use of renewable energy is another step towards climate neutrality in cement production and our contribution to reducing the country’s overall CO2 footprint,” says Evita Goša, Member of the Board of SCHWENK Latvija, Director of Environment and Legal Affairs. “The Brocēni cement factory is already one of the most environmentally friendly in Europe and with ongoing investments we are moving towards climate change neutrality. This solar park will provide around 4.5% of our annual electricity consumption. Considering that the cement factory is one of the largest electricity consumers in Latvia, this represents a significant amount of electricity in MWh terms and is equivalent to the annual consumption of several thousand households.”

The total investment in the Brocēni solar power plant project is EUR 4.6 million, of which EUR 3.55 million is a loan from SEB Bank, EUR 850,000 from the BaltCap Infrastructure Fund and EUR 200,000 from the Solar Core Plus Fund invested by PV Power Ltd.

PV Power is a joint venture between two funds, Solar Core Plus and BaltCap, and the energy group AJ Power, established with the aim of developing solar energy production in Latvia. “Solar Core Plus is a fund established by the alternative investment fund manager AJP Capital. The fund was established in 2022, attracting capital from Latvian investors, with the aim of investing in the circular economy segment, including significant renewable energy generation projects.

About AJ Power group
AJ Power, the largest Latvian private energy group, was established in 2014. AJ Power offers integrated energy services: sales of electricity and natural gas, implementation of energy efficiency and solar panel projects, as well as a system for managing the Natural resources tax. With its energy and waste management solutions, AJ Power gives businesses an opportunity to join the circular economy. In 2020, the turnover of AJ Power group was EUR 70 million.

About AJP Capital
AJP Capital is an alternative investment fund manager established in 2021 and registered with the Financial and Capital Market Commission of Latvia (FCMC). AJP Capital involves investors into the circular economy by providing a versatile offer of investment opportunities. The investment funds managed by AJP Capital invest in circular economy projects of varying risk and scale. These investment projects include energy generation from renewable sources, infrastructure development and adjustment to the circular economy, energy efficiency, and transport.

BaltCap’s school revitalisation project awarded by United Nations

May 2023/in Infrastructure /by Laura Põldma

A public-private partnership project of school revitalisation, implemented by BaltCap Infrastructure Fund, received a special commendation at the 7th edition of the United Nations Economic Commission for Europe (UNECE) International PPP Forum in Athens, Greece. The international jury awarded the project for its environmental sustainability, resilience and replicability.

BaltCap Infrastructure Fund and Kaunas District Municipality signed the 15-year public-private partnership (PPP) agreement to upgrade education infrastructure in the towns of Mastaičiai, Kačerginė and Zapyškis in 2020. BaltCap committed to investing €13.6 million to revitalise two existing schools, a swimming pool and construct a new school building and sports facilities. Construction of the buildings and related facilities was successfully completed in December2022.

“The decisions we make at the design stage will impact the environment throughout the asset lifetime. We are extremely proud to stick to our core value of no compromise when it comes to sustainability and to be recognized by the United Nations for this effort during this very challenging economic cycle. We also noticed that this project became an inspiring example for others to act on much-needed change in terms of access to quality education and climate change mitigation”, commented Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

“Implementing the Sustainable Development, the new game, and working to achieve the SDGs implies having PPPs as key players of this new game. Evidence that this is possible, and the impact goes beyond expectations is of primary importance for the UN ecosystem. The Lithuanian PPP project, BaltCap´s school revitalisation, is a great example for all of us, and we expect to see it scaled up and replicated around the world”, stated Prof. Pedro Mateus das Neves, PhD, United Nations Advisor & Consultant on SDGs Implementation.

“It is very important that the Kaunas district municipality project is replicable – the success story of the school reconstruction project inspired three more municipalities to initiate PPP projects to increase the energy class of the buildings”, said Ieva Dženkauskaitė, an expert at CPMA.

The project provides a modern educational environment and additional access to education for 540 pupils in Kaunas district and allows local schoolchildren to avoid daily commuting to faraway schools.

In 2019, BaltCap Infrastructure Fund invested €11 million in a 7,500m2 greenfield private school project in Vilnius, Lithuania and €4.1 million to renovate two schools and sports and culture centre in Mielno, Poland. A €8 million greenfield school project in Vilnius is due to be completed in Q4 2023.

BaltCap to develop a €22 million Police Headquarters PPP project in Lithuania

Dec 2022/in Infrastructure /by Laura Põldma

BaltCap, the largest private equity firm in the Baltics, and the Police Department of Lithuania have signed a contract to design, build, finance and operate the new County Police Headquarters in Šiauliai, Lithuania. Total value of the signed public-private partnership (PPP) agreement is €21.9 million. BaltCap’s project company Safe Community takes on the task to complete the development of the new headquarters within 3 years and to provide facility maintenance and operation services for another 12 years.

A new building with an area of almost 5,200 square meters will be built on a land plot of 1.4 ha in Šiauliai. It will include a 4-storey building for 245 employees, a 270-space parking lot, out of which 49 spaces will be reserved for visitors. The facility will be designed by 2L architects.

“The infrastructure upgrade program implemented by the Police Department using PPP model is a major success story of Lithuania’s public sector infrastructure reform in recent years. Timely completed projects over the last few years already allow to reap the benefits, especially in the face of increased construction prices, utility costs and rising interest rates. We hope that the new headquarters building in Šiauliai will ensure the necessary quality and functionality of the work environment and will contribute to creating a safe environment for the community,” said Šarūnas Stepukonis, partner of BaltCap Infrastructure Fund.

Renatas Požėla, Police Commissioner General, admitted that the project will significantly improve the working environment for the police personnel, officers will work and provide services to residents in modern and fit for purpose A++ energy class building. Furthermore, it will help to reduce operating costs and the total area of facilities used by Šiauliai County Police Headquarters will decrease by 21 percent. Currently it operates in eight buildings with a total area of 7.8 thousand square meters.

The construction of the Šiauliai County Police Headquarters is already the fourth PPP project implemented by the Lithuanian Police Department. The procurement process for the developing of public infrastructure and the provision of public services of the Šiauliai County Police Headquarters was announced in November 2020. The winner has been selected in March of 2022. Procurement process has been executed by Central Project Management Agency.

BaltCap has a significant experience of cooperation in PPP projects. It implements the reconstruction project of three schools in the Kaunas district and the project of the National Stadium in Vilnius. BaltCap also developed 4 education and street lighting PPP projects in Poland.

BaltCap Infrastructure Fund starts the construction of EUR 42 million wind farm

May 2022/in Infrastructure /by Laura Põldma

BaltCap Infrastructure Fund starts the construction of a EUR 42 million wind farm project in Lithuania. Six wind turbines with a total capacity of 30 MW will be installed in the Žvirgždaičiai, Šakiai district. The project will be financed by the fund’s investment of EUR 15 million, and a credit of EUR 27 million will be provided by Luminor bank.

The project is being implemented by Žvirgždaičių energija, a company controlled by the fund, and it is planned that electricity production in the power plant will start in the second quarter of the year 2023.

“This is the third wind energy project developed by BaltCap – together with our partners, we developed and sold wind power parks with a total capacity of 42 MW in Lithuania and Estonia in 2016. The production of sustainable electricity produced in the Žvirgždaičiai project next year will boost the fund’s created annual CO2 savings by about a quarter and will contribute to the consolidation of the region’s energy independence,” said Šarūnas Stepukonis, a partner at BaltCap Infrastructure Fund.

6 GE Cypress turbines installed on masts of 121 meters in height have a capacity of 5.5 MW each. The turbines will be manufactured and installed by General Electric’s GE Renewables. Connecto Lietuva will construct the power substation. The foundations of the power plants will be built by Panevėžio statybos trestas. Anykščių melioracija will take care of the road infrastructure.

“Luminor has been partnering with BaltCap for many years, and we appreciate the fact that the investments of the funds they manage are increasingly focused on projects where sustainability is not an adjunct but the backbone of the idea and the basis for future success. This is fully in line with Luminor’s approach to modern business principles. Moreover, renewable energy is gaining great importance for the whole of Europe in the urgent search for solutions in the face of Russian aggression and the isolation of this country,” said Andrius Načajus, Head of Luminor Bank Lithuania.

In 2014, BaltCap invested in a wind farm in Lithuania and Estonia. In 2016, both wind farm companies Eurakras and Tuuleeenergia were sold to the then Lietuvos Energija (now Ignitis).

BaltCap invests in solar energy generation in Latvia to enhance the energy independence in the Baltics

Apr 2022/in General, Infrastructure /by Laura Põldma

BaltCap Infrastructure Fund, AJ Power group and AJP Capital’s Solar Core Plus Fund have signed an agreement to establish a joint venture to develop solar energy generation in Latvia. 30 MW solar farms will be built over the next three years. The plan also foresees expansion across the Baltics and increasing the capacity of the solar plant portfolio to 100 MW.

Matīss Paegle, Investment Director at BaltCap, says: “In this project, we are joining forces with AJ Power – the largest private PV developer in Latvia. This investment will contribute to both Latvia’s energy independence and the achievement of the sustainability goals. Green energy is our future, which means not only environmentally sustainable operations, but it also has a real economic basis.”

Roberts Samtiņš, the CEO of AJ Power group, says: “In Latvia, solar energy has become one of the most attractive investments in the market. Due to several circumstances, now is the best time for implementation of such large-scale solar parks: first of all, it is the European Green Deal, second, the rapid increase in energy prices and, third, the need to reduce Latvia’s dependence on energy supplied from third countries. The recent situation has only reaffirmed the need for such projects to diversify production capacity and stabilise electricity costs in the long term, preventing uncontrolled increases in electricity prices. This is also confirmed by the fact that in recent years we have already implemented many significant solar panel projects in Latvia, which serve as excellent examples of the great potential of solar energy.”

Didzis Bērziņš, Member of the Council at AJP Capital, adds: “We are thrilled to announce a joint venture among Solar Core Plus fund, BaltCap infrastructure fund and AJ Power in developing industrial scale photovoltaic electricity generation parks throughout Latvia and beyond. Today the initiative is especially important in the context of EU member state efforts to reduce energy dependency and in the context of the world’s efforts to counter looming negative effects of the climate change. The joint initiative will bring together extensive experience in renewable energy project development, large scale infrastructure project financing experience and determination for success.”

BaltCap Infrastructure Fund portfolio saved 119,757 tons of CO2 emissions in 2021

Feb 2022/in Infrastructure /by Laura Põldma

BaltCap Infrastructure Fund (BInF) portfolio accomplished 2% growth in reducing CO₂emissions compared to 2020.

Reducing carbon emissions and eliminating dependence on fossil fuels is part of BInF’s commitment to the climate change mitigation agenda. BInF portfolio contributed to the CO₂ emission savings by replacing fossil fuel use for heating and hot water and reducing GHG emissions through the following investments:

a biomass-fired combined heat and power plant in the Riga region;
three biogas plants in Latvia;
a heat-only boiler producing heat to the Vilnius district;
deep energy modernisation of public buildings in Poland.

Find out more on BInF investment strategy and portfolio.

*119,757 tons of CO2 emissions is equivalent to the carbon sequestered by ca 1,951,200 tree seedlings grown for ten years and CO2 emitted by an average car when driving 500 million kilometres.

BaltCap Infrastructure Fund will finance greenfield biomass CHP construction in Alytus

Dec 2021/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund (BInF) is providing a loan of EUR 6 million via its subsidiary Forest Investment to construct a biomass combined heat and power plant in Alytus. The project is being developed by the local company Biovatas. It is planned that the powerplant will start the production of heat and electricity in 2023.

The new power plant will have a 2.5 MW electric turbine and a 12 MW heat boiler with flue gas condensing economizers. Additionally, a biomass warehouse and storage site will be constructed on the plot located on Pramonės Street in the capital of the Dzūkija region.

“This is the third biomass energy project we are financing, and they are all united by our commitment to contribute to the climate change mitigation agenda by reducing carbon emissions and eliminating dependence on fossil fuels. Moreover, every such project contributes to reduced heat prices in a market, which is currently experiencing shockwaves due to global soaring energy prices,” said Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

Through its subsidiary Forest Investment, the fund operates a biofuel powerplant house in Vilnius and has invested in a biofuel powerplant in Riga.

The company Biovatas, founded in Alytus 7 years ago, currently operates a 15 MW biofuel powerplant and supplies clean heat to all consumers connected to the centralized heating system of Alytus city.

For more information:

Šarūnas Stepukonis
sarunas.stepukonis@baltcap.com
Phone: +37068666201

BaltCap Infrastructure Fund will invest EUR 6 million into private school project in Lithuania

Dec 2021/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund (BInF) will finance EUR 6 million development of a private school in Vilnius. The school will be built in Vilnius City Innovation Industrial Park and will be operated by The British School of Vilnius (BSV). The school will be designed by 2L architects and developed via a special purpose company BSV Development.

Located on the 12 thousand sq m plot, the A ++ energy class, 4-storey, 4 thousand sq m building will have large, modern and bright classrooms. It will include a science laboratory and art classes, a gym, a swimming pool, and outside sports infrastructure with football pitch and basketball court. The design phase is planned to be finalized by August 2022 and the construction to be completed by the end of 2023.

BInF will own and lease the school for 20 years. At the end of the contract period, BSV will buy it out.

“We see private school operators increasingly taking a lead role in upgrading outdated education infrastructure in Lithuania and sharing the burden with public sector. Our infrastructure dedicated fund has a long-term investment focus and all the necessary tools to support BSV with their ambition to create a modern school for providing quality education. We are sure this is not the last school to be financed by us in the near future,” says Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

According to the plans the new school will accommodate up to 400 children from both preschool and school. The complex will employ up to 50 teachers and administrative staff.

“This is a very exciting stage in the school’s development and we are looking forward to working with BaltCap to create a state of the art campus that will allow the school to continue to offer a world class education to families in Vilnius that is on par with the very best private schools in the UK. BaltCap’s wealth of experience in infrastructure investment and previous experience in school development will be valuable in making our new campus a success,” says Mr. Andrew Prosser, the Headmaster of The British School of Vilnius.

„Just in a couple of years VCIIP will become a city with about 1000 people working daily in Lithuanian and international companies and research centres. Without doubt access to educational services that meet the expectations of VCIIP community will be very important,” says dr. Gediminas Pauliukevičius, the director of Northtown Vilnius, the operator of Vilnius City Innovation Industrial Park.

“Educational facilities significantly impact pupils’ creativity, achievements, and the well-being of the entire community. Our team sees profound meaning in educational projects, thus, we are thrilled to be chosen as the partner for already our seventh school design project,” says Paulius Latakas, the managing partner at 2L Architects.

In 2018, BaltCap Infrastructure Fund financed the EUR 11 million school and preschool complex in Kalnėnai district, in Vilnius. The Queen Morta School and “Vaikystės sodas” preschool is housing the building since the beginning of 2020.

For more information:

Šarūnas Stepukonis
sarunas.stepukonis@baltcap.com
Phone: +37068666201

BaltCap Infrastructure Fund to upgrade sports infrastructure in Poland

Nov 2021/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund portfolio company IZIM and the urban municipality of Lubań signed a Public-Private Partnership (PPP) agreement to modernise a sports hall and a swimming complex in Lubań, Poland. The PLN 20 million project aims for increased energy efficiency and is to be completed in September 2023.

The main aim of the project is to create the residents of Lubań an up-to-date sports complex that meets the latest industry standards. The current sports hall and related indoor swimming pool are modernised and functionally expanded; also, the energy class of the existing buildings will be increased. After the upgrade, the facilities’ thermal and electric energy consumption and related CO2 emissions will be considerably reduced.

Under the contract, IZIM will be responsible for the entire project, financing, and technical maintenance of the facilities, particularly energy management. The agreement was signed for a period of ten years.

Arkadiusz Słowiński, mayor of Lubań, emphasised that the modernisation of the sports hall and swimming pool at the City Sports and Recreation Centre in Lubań is a significant investment that will considerably improve Lubań’s recreational and sports offering. “I am glad that the new, energy-efficient infrastructure will be ready in less than two years. Furthermore, the public-private partnership model allows to implement the project quickly and cost-effectively,” said Słowiński.

Maciej Kopański, Investment Director at BaltCap Infrastructure Fund, claimed they aim to provide the residents of Lubań with an up-to-date sports complex that meets the latest industry standards.
“The collaboration with the city of Lubań is yet another PPP project being implemented by IZIM and BaltCap in Poland. Our dedicated team has the relevant experience and competence to carry out the project. In addition, our solid, long-term relations with leading suppliers allow us to guarantee the highest quality and efficiency of the technical solutions,” Kopański confirmed.

Lubań is situated in the western part of the Lower Silesia voivodship, on the touchpoint of two historical regions: Upper Lusatia and Lower Silesia. Vital communication routes to the nearby German and Czech borders pass through the city. The city of Lubań is located on 16.12 square kilometres and has approx. 20 000 residents.

IZIM is a specialised entity owned by BaltCap Infrastructure Fund that helps local governments and other public-sector entities prepare, finance and implement complex investments related to public infrastructure, particularly in the public-private partnership (PPP) formula.

Additional information:

Maciej Kopanski
Investment Director
BaltCap Infrastructure Fund
maciej.kopanski@baltcap.com

BaltCap and Lithuanian Ministry of Education, Science and Sport, and Vilnius City Municipality signed the largest PPP agreement in the Baltics

Oct 2021/in Infrastructure /by Riin Savi

A 25-year concession agreement to create an 85 thousand sq. m. multifunctional sports complex in Vilnius, also known as National Stadium, was signed today. Ministry of Education, Science and Sports, and Vilnius City Municipality have signed an agreement with a company controlled by BaltCap Infrastructure Fund (BInF). The total value of the concession agreement is €280 million, while the estimated CAPEX is around €100 million.

The project will be implemented by BInF company Vilniaus daugiafunkcis kompleksas, using the design-build-finance-operate model and completed within three years after the financial closing. After commissioning, the concessionaire undertakes to operate the complex for the next 22 years.

Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund, said the project has a remarkable social impact not encountered before in urban revitalization in Lithuania. „The project revitalizes a large, abandoned area in the heart of Vilnius. It creates a multifunctional community infrastructure that helps to generate a double-digit social and economic return for the city and country,” Stepukonis explained.

A 22ha of abandoned territory in the Šeškinė district of the capital city with old ruins of unfinished construction will be revitalized. A 15 thousand seat UEFA IV category stadium with a sports museum, a 3 thousand seat IAAF stadium, outdoor and indoor sports facilities, a kindergarten, and a culture and education centre for the local community will be built at the site.

The architects of the project are Cloud architects and Populous. The complex will be designed and constructed to be A++ energy efficiency class as well as BREEAM certified.

Vilniaus daugiafunkcis kompleksas is controlled by BInF, which owns 98 percent of the concessionaire.

The €100 million BaltCap Infrastructure Fund has a length of 20 years, and it was established for investments in infrastructure development in Lithuania, Latvia, and Estonia. BInF has extensive experience in PPP projects in the Baltic region and Poland.

Additional information:

Šarūnas Stepukonis
Partner, BaltCap Infrastructure Fund
sarunas.stepukonis@baltcap.com
www.baltcap.com

BaltCap Infrastructure Fund signs agreement to sell biomass CHP in Riga to Northern European district heating company Gren

Jul 2021/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund (BInF) has signed an agreement to sell Energia Verde, a company that operates a biomass combined heat and power plant (CHP) in the Riga region, to Gren, the Northern European green energy company. The transaction is subject to customary closing conditions.

BInF acquired the majority of Energia Verde in 2018, roughly one year after the power plant started its operations. The woodchip-fired CHP plant is equipped with 18 MW HoSt Bio-Energy Installations high-pressure water tube steam boiler and a 3.98 MW steam turbine. The plant produces electricity and provides heat to the Riga district heating system.

“Over the last three years, Energia Verde has been the cheapest heat producer in the Riga district heating system. This was an extremely important factor of our social responsibility agenda in addition to the environmental impact that the asset has on CO2 emissions. The affordability of Energia Verde’s heat production is among others thanks to the continued regulatory support around the renewables sector, in particular institutionally owned combined heat and power generation,” says Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

Gren focuses on developing and providing sustainable energy solutions, primarily district heating, using renewables and local resources to meet local communities’ needs and provides comfort for their daily lives while also having a positive impact on the environment. The acquisition of Energia Verde is part of Gren’s strategy to grow through new greenfield projects and targeted strategic acquisitions. Other transformational initiatives will include extending Gren’s heating networks to develop new heating and cooling solutions for industrial and commercial customers.

About Gren
Gren, the Northern European green energy company, focuses on developing and providing sustainable energy solutions, primarily district heating, to meet its local communities’ needs in their daily lives while having a positive impact on the environment. Gren was relaunched by Partners Group, a leading global private markets firm, acting on behalf of its clients, after acquiring Fortum’s heating & cooling businesses in the Baltic countries in 2021.

About Partners Group
Partners Group is a leading global private markets firm. Since 1996, the firm has invested over USD 145 billion in private equity, private real estate, private debt and private infrastructure on behalf of its clients globally. Partners Group seeks to generate strong returns through capitalizing on thematic growth trends and transforming attractive businesses and assets into market leaders. The firm is a committed, responsible investor and aims to create sustainable returns with lasting, positive impact for all its stakeholders. With over USD 109 billion in assets under management as of 31 December 2020, Partners Group provides an innovative range of bespoke client solutions to institutional investors, sovereign wealth funds, family offices and private individuals globally. The firm employs more than 1,500 diverse professionals across 20 offices worldwide and has regional headquarters in Baar-Zug, Switzerland; Denver, USA; and Singapore. It has been listed on the SIX Swiss Exchange since 2006 (symbol: PGHN).

For more information:

Šarūnas Stepukonis
sarunas.stepukonis@baltcap.com
Phone: +370 6866 6201

BaltCap to carry out largest street lighting PPP investment in Poland

Jan 2021/in Infrastructure /by Riin Savi

BaltCap portfolio company IZIM and the municipality of Miedźno signed a public-private partnership (PPP) agreement to modernize and significantly expand lighting infrastructure in Miedźno. Nearly 1900 LED lamps will be deployed within the Miedźno municipality over the next two years. The project is worth nearly PLN 22.4 million, making it the largest local-government investment in street lighting in Poland conducted as a public-private partnership.

The agreement between BaltCap’s IZIM and the municipality of Miedźno encompasses the construction of new and exchange of all existing lamps. IZIM will be responsible for the entire project, including financing as well as the operation and maintenance of the lighting infrastructure for eight years.

The street lightning infrastructure will be modernized not only in Miedźno but also in other towns within the municipality. Modern energy-efficient lighting will be deployed in Borowa, Dębiniec, Izbiska, Kołaczkowice, Mokra, Ostrowy nad Oksza and Wapiennik, as well as along the main roads within the municipality.

“The project being done in collaboration with IZIM is certainly one of the most important investments for our municipality in the recent years. Over the next two years, the number of lighting points will practically triple. It is also of key importance to us that the lighting will cover the municipality’s entire road infrastructure, which will have a positive impact on safety as well as the quality of life of the residents. The second significant element is energy efficiency, which results from using LED lamps. Thanks to this, our municipality will not be incurring higher energy consumption costs than currently despite such a considerable expansion of the infrastructure. Therefore, this is a significant investment in terms of concern for the natural environment,” said Piotr Derejczyk, head of the Miedźno municipality.

“I would also like to note that carrying out such a large investment so quickly turned out to be possible only as a public-private partnership. If we were to do this in a traditional manner – financing it on our own and with loans – it would not be possible. This is certainly a benefit for us,” he added.

“BaltCap has extensive experience in implementing public investments in Poland – this is already the third PPP project launched in the past several months. We are actively participating in other similar tenders and hope that our presence on the Polish market will grow in the near future. We are eager to support local authorities in building modern, sustainable infrastructure and create a better future. We appreciate the opportunity to deliver such a large investment – this validates our accomplishments so far and assures BaltCap and IZIM are heading in the right direction,” added Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

“The investment in the Miedźno municipality is an excellent example of how public-private partnerships can effectively serve to meet the needs of residents, accomplish public policy objectives and develop business. The scale of this project certainly makes an impression – this is without a doubt the largest investment of this type being implemented in Poland. I sincerely hope that Miedźno will serve as an example and will encourage other local government units and businesses to further develop PPPs. This is a platform that delivers mutual, tangible and lasting benefits,” said Rafał Cieślak, a lawyer in charge of the team of advisers in signing the contract.

IZIM is a specialist entity owned by BaltCap Infrastructure Fund that helps local governments and other public sector entities in preparing, financing and implementing complex investments related to public infrastructure, especially under public-private partnerships (PPP).

BaltCap is a leading private equity investor in the Baltics. The company has been operating in the region since 1995, its investors include the European Investment Bank, European Bank for Reconstruction and Development and leading Scandinavian pension funds. BaltCap Infrastructure Fund (BInF) has extensive experience in PPP projects in the Baltic region.

For more information, visit www.izim.pl and www.baltcap.com or contact:

Sarunas Stepukonis
Partner, BaltCap Infrastructure Fund
Phone  +370 6866 6201
sarunas.stepukonis@baltcap.com
www.baltcap.com

BaltCap to finance the largest PPP for the construction of local government street lighting in Poland

Nov 2020/in Infrastructure /by Riin Savi

BaltCap portfolio company IZIM officially inaugurated a public-private partnership (PPP) with the municipality of Kobylnica to design, build and maintain modern street lighting in 12 towns. The investment will enhance the safety and comfort of residents.

The project is worth PLN 12 million gross in total, making it the largest local government investment in street lighting under a public-private partnership in Poland.

Pursuant to the agreement, IZIM will be responsible for designing, financing and building energy-efficient LED lighting along municipal roads within the municipality of Kobylnica, as well as for maintaining this infrastructure for 12 years.

IZIM will install more than 800 modern LED lighting fittings along approximately 30km of roads. Most of the new lighting poles will be located in the towns of Kobylnica, Łosino and Bolesławice. New street lighting will also be built in Kruszyna, Sierakowo Słupskie, Kończego, Kuleszewo, Widzino, Reblinko, Kwakowo, Sycewice and Zębowo. According to the agreement, design and construction works will be completed over the next 12 months.

“This is a very important investment for our municipality and another one being financed in a public-private partnership. This project will provide lighting for local roads, especially in emerging residential areas, which will significantly improve the safety and comfort of residents and other road users. Additionally, by using energy-efficient LED lighting fittings and a central lighting management system, which makes it possible to reduce light intensity at night, electricity consumption will be very efficient,” said Leszek Kuliński, head of the Kobylnica municipality. “The modern LED fittings that will be set up on our streets use 50-70% less energy than traditional lighting. This is important to us in terms of environmental protection and maintaining control over current budget expenditures,” added Leszek Kuliński.

“For BaltCap, the agreement with the Kobylnica municipality represents yet another investment in Poland, and the first one in street lighting. The investment contributes strongly to energy efficiency and the safety for Kobylnica inhabitants. We are also participating in other tenders organised by Polish municipalities to continue supporting them in improving and creating sustainable infrastructure for local communities. Such partnerships enable further development opportunities for municipalities in these unprecedented times,” said Šarūnas Stepukonis, partner at BaltCap Infrastructure Fund.

IZIM is a specialist entity owned by BaltCap Infrastructure Fund that helps local governments and other public sector entities in preparing, financing and implementing complex investments related to public infrastructure, especially under public-private partnerships (PPP).

BaltCap is a leading private equity investor in the Baltics. The company has been operating in the region since 1995, its investors include the European Investment Bank, European Bank for Reconstruction and Development and leading Scandinavian pension funds. BaltCap Infrastructure Fund (BInF) has extensive experience in PPP projects in the Baltic region.

For more information, visit www.izim.pl and www.baltcap.com or contact:

Sarunas Stepukonis
Phone +370 6866 6201
sarunas.stepukonis@baltcap.com

BaltCap to upgrade education infrastructure in Kaunas District

May 2020/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund and Kaunas District Municipality signed a 15-year public-private partnership (PPP) agreement to upgrade education infrastructure in towns of Mastaičiai, Kačerginė and Zapyškis. BaltCap will invest €13.6 million to revitalise two existing schools, a swimming pool and to construct a new school building and sport facilities.

“We acknowledge Kaunas District Municipality team for initiating the very first PPP project for school renovations in Lithuania. We believe it will have a significant impact on the further upgrade of education infrastructure in the country,” Sarunas Stepukonis, partner at BaltCap Infrastructure Fund commented. “This project will improve the quality of educational and social service as well as create jobs and attract much needed investment in the region during these turbulent times,” Stepukonis added.

The upcoming project aims to increase the energy class of the existing school buildings as well as to expand and modernize the sport facilities. The project creates an additional capacity for serving 500 pupils in the neighbouring districts and allows local schoolchildren avoid daily commuting to faraway schools.

“Kaunas district is rapidly growing and we optimize and expand the network of educational institutions constantly. With rising birth rates, we are facing a shortage of capacity in kindergartens and primary schools. Kaunas District increasingly invests in education every year, but the efforts of the municipality alone are not enough. This problem needs to be addressed immediately, because children cannot wait. We hope that the partnership with private sector will help us to move forward faster,” Kaunas District Mayor Valerijus Makūnas said.

The project is carried out in partnership with 2L architects. Design and construction works are planned to begin this summer and be completed by autumn 2022 in all towns. Technical maintenance service over the 13-year operational phase will be provided by Yglė Pastatų Valdymas.

This is the BaltCap Infrastructure Fund’s (BInF) third investment in education infrastructure over the last two years. Previously, the fund invested €11 million in a 7,500m² greenfield school in Vilnius, and €4.1 million in 2 schools, sports and culture centre renovation in Mielno, Poland.The €100 million BInF has a length of 20 years and it was established for investments in infrastructure development in Lithuania, Latvia, and Estonia.

Investors in the fund include all the largest pension funds in the Baltic States, a life insurance company and other institutional investors. Lithuanian, Latvian and Estonian pension funds account for 60% of investments in the BInF, marking the largest-ever commitment by local pension funds to any single fund in the Baltics to date. The European Bank for Reconstruction and Development and European Investment Bank have each committed €20 million to the fund. European Investment Bank financing is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe.

Additional information:

Šarūnas Stepukonis
Partner, BaltCap Infrastructure Fund
sarunas.stepukonis@baltcap.com
Tel: +370 6866 6201

BaltCap Infrastructure Fund to finance modernisation of public buildings in Mielno, Poland

Nov 2019/in Infrastructure /by Riin Savi

The Poland-based company IZIM, which is owned by BaltCap Infrastructure Fund (BInF), has won a municipal tender in the Polish coastal town of Mielno on increasing the energy efficiency of public buildings. The fund will invest more than EUR 4 million (over PLN 17 million), which will be used to renovate two schools, a social care centre and a sports facility.

IZIM will carry out project and, under a Public Private Partnership (PPP) contract with the municipality of Mielno, ensure the renovation and maintenance of the buildings. The contract was signed on 29 November 2019 and has a length of 8 years. The event is noteworthy because this is the first hybrid project in the Zachodniopomorskie voivodship.

“This is an exceptionally important day for the Municipality of Mielno. The signing of this contract is the crowning moment after four years of hard work. This is the largest contract in our municipality’s history and the largest project financing from the Marshal’s Office. We are proud to be implementing the first hybrid project in the Zachodniopomorskie voivodship. Of course, this is also a formidable challenge – we are getting signals that numerous municipalities are watching our moves and considering whether to follow in our footsteps. I think that this is an important moment for development of the PPP market not just in the region but also throughout Poland,” said Olga Roszak-Pezała, Mayor of Mielno.

The renovation works in all four locations – the primary schools at Lechitów St. in Mielno, the primary school at Nadmorska St. in Sarbinowo, the MOPS building at 6 Marca St. and the MOSiR building at Słoneczna St. in Mielno – will include, among others, insulation of walls, windows ugrade and modernization of heating installations. Energy-efficient LED lighting and photovoltaic panels will also be installed in the buildings, which will significantly reduce electricity bills. The project also includes implementation of a remote energy management system that will allow 24/7 management, control and monitoring of heat and electricity consumption in the facilities.

“This project will make it possible to not just improve the quality of public services provided by the Mielno municipality but also reduce the consumption of heat energy and electricity as well as CO2 emissions by more than 70 percent. We expect it won’t be the last energy efficiency project in our portfolio – a number of bids of a similar nature are now in preparation in public tenders being held by Polish municipalities,” said BaltCap Infrastructure Fund Partner Šarūnas Stepukonis.

BaltCap established the €100 million BInF for investments in the development and renewal of transport, renewable energy, energy efficiency and muncipal infrastructure.

The European Investment Bank has committed €20 million to the fund, with financing guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the European Commission’s Investment Plan for Europe (also known as the Juncker Plan). The European Bank for Reconstruction and Development (EBRD) has also committed €20 million. The fund has a length of 20 years and its investors include all the largest pension funds in the Baltic States, a life insurance company, and other institutional investors. Combined investments by Lithuanian, Latvian and Estonian pension funds account for 60 percent of all investments in the BInF – the largest-ever commitment to a single fund by local pension funds in the Baltics.

The project – entitled “Modernisation of public utility facilities in Mielno Municipality” – is co-financed by the European Union under the Regional Operational Programme for Zachodniopomorskie Voivodship 2014-2020.

For more information please contact:

Šarūnas Stepukonis
Partner, BaltCap Infrastrcuture Fund
sarunas.stepukonis@baltcap.com
Tel: +370 6866 6201

BaltCap Infrastructure Fund increases renewable energy portfolio by acquiring a biomass CHP in Riga region

Oct 2018/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund increases renewable energy portfolio by acquiring a biomass CHP in Riga region

BaltCap Infrastructure Fund (BInF) has acquired 70% of shares in biomass combined heat and power plant in Riga region from Latvian company AS ENERGOECO. Highly efficient woodchip-fired CHP plant started to operate in October 2017, capital expenditure for building and launching the plant was €17 million. The transaction is expected to close after receiving competition clearance.

The power plant is equipped with 18 MW HoSt Bio Energy Installations high-pressure water tube steam boiler and a 3.98 MW steam turbine. The plant produces electricity and provides heat to Riga district heating system.

“We have been following CHP plant development in Acone industrial park for the last two years and saw it as a technologically sound and well-executed project that perfectly fits into our portfolio. With this investment, we will get one step closer to our goal to invest at least 40% of the fund into climate change mitigation projects. This investment becomes increasingly important and urgent in the light of recently published IPCC Special Report on Global Warming,” says Šarūnas Stepukonis, BaltCap Infrastructure Fund manager.

This is the third BInF investment into renewable energy projects. In September 2017, the fund invested in a project valued at €16 million to build a biomass plant in Vilnius, and late in the year acquired Latvian biogas plant operator Anaerobic Holding for €9.45 million. Anaerobic Holding consists of three biogas plants with a total installed capacity of 4.9 MW.

BaltCap launched BInF in July 2017. The €100 million fund has a length of 20 years and it was established for investments in infrastructure development in Lithuania, Latvia, and Estonia.

Investors in the fund include all the largest pension funds in the Baltic States, a life insurance company and other institutional investors. Lithuanian, Latvian and Estonian pension funds account for 60% of investments in the BInF, marking the largest-ever commitment by local pension funds to any single fund in the Baltics to date. The European Bank for Reconstruction and Development and European Investment Bank have committed €20 million each. European Investment Bank financing is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe.

For more information contact:

Sarunas Stepukonis
Partner, BaltCap Infrastructure Fund
Phone: +370 5254 6713
sarunas.stepukonis@baltcap.com
www.baltcap.com

More steam for BaltCap Infrastructure Fund: EBRD invests €20 million

Jul 2018/in Infrastructure /by Riin Savi

The European Bank for Reconstruction and Development (‘EBRD’) commits to invest €20 million into the BaltCap Infrastructure Fund (‘BInF’). The President of EBRD, Sir Suma Chakrabarti signed the agreement today during a signature ceremony held at the Ministry of Finance of Estonia in Tallinn. With additional contribution from Citadele pension funds and existing investors, BInF has reached its hard cap of €100 million.

The President of EBRD, Sir Suma Chakrabarti said, “We are pleased to support the BaltCap Infrastructure Fund with a sizeable €20 million investment. The fund will address the scarcity of infrastructure equity funding in the region and promote the private financing of crucial infrastructure in all three Baltic States. With the fund’s strong commitment to the climate change mitigation, the Bank’s support of the BaltCap Infrastructure Fund sets an important milestone in EBRD’s promotion of green agenda in the private equity industry.”

The Minister of Finance of Estonia, Toomas Tõniste, said, “We are proud to welcome this investment in the Baltcap Infrastructure Fund, the first infrastructure fund in the Baltics with the goal to catalyse private investors to finance infrastructure projects. The fund’s investment strategy addresses the rising investment needs in the region in transport, energy efficiency, and renewable energy sectors. Last year, the new Estonian regulation for a new type of fund in the form of a limited partnership came into effect. This fund regime has been designed along the lines of the best qualities of limited partnership structures of various countries. We are glad more and more regional venture capital fund managers, including BaltCap, are using the new Estonian limited partnership type of fund.”

With €20 million equity commitment EBRD becomes the second anchor investor of the BInF together with European Investment Bank that contributed the same amount of investment last year.

“For us it was imperative to attract EBRD as one of the anchor investors of the fund, especially because of their institutional expertise and commitment to the growth of the Baltic region. We are humbled with the trust of our investors that put us in a unique position to provide unmatched long-term financing solutions for sustainable homeland infrastructure development,” says Šarūnas Stepukonis, Partner of BaltCap Infrastructure Fund.

The BInF also receives an investment from Citadele pension funds increasing total amount of the fund up to €100 million.
BaltCap launched the BInF in July last year with the expected size of €100 million. The fund invests into transport, energy and social infrastructure development across Lithuania, Latvia, and Estonia.

Since the start of operation, the fund invested €16 million into 48MW biomass plant in Vilnius, Lithuania. The plant will be built and become operational by the beginning of 2019. According to estimations, the plant will generate nearly 10% of Vilnius’ heat demand. Last year the fund also acquired 75% of Anaerobic Holding’s shares for €9.45 million. Anaerobic Holding owns and operates three biogas plants in Latvia with a total installed capacity of 4.9MW.

Investors of the BInF include all of the largest pension funds of the Baltic States, a life insurance company, and international financial institutions. More than half of the funds are raised from the pension funds based in Lithuania, Latvia, and Estonia – it is the largest combined local pension funds commitment to the Baltics-focused private equity fund to date.

Additional information:

Šarunas Stepukonis
Partner of BaltCap Infrastructure Fund

Phone: +370 6866 6201

sarunas.stepukonis@baltcap.com

BaltCap Infrastructure Fund acquires Anaerobic Holding

Dec 2017/in Infrastructure /by Riin Savi

BaltCap Infrastructure Fund (BInF) has aquired 75% of Anaerobic Holding shares for €9.45 million. Anaerobic Holding owns and operates three biogas plants in Latvia with a total installed capacity of 4.9MW.

Anaerobic Holding group consists of three biogas plants with a total installed capacity of 4.9MW, namely Agro Iecava, RZS Energo and AD Biogazes Stacija, as well as two biogas raw material supply companies – BGGS Serviss and Aizkalnu Tehnika. Both of the latter secure all organic raw materials required for biogas plant operations. Before the acquisition the largest shareholder of the group’s companies has been Latvian entrepreneur Nils Aleksa, who will stay on as a joint venture partner with BInF.

‘Anaerobic Holding has developed the most efficient biogas plant portfolio in Latvia, not only generating electricity but also providing excess heat to business consumers and municipalities. This renewable energy investment fits into fund’s portfolio due to long term useful asset life that enables us to provide double-digit returns for pension funds which have invested into BInF,’ says Šarūnas Stepukonis, BaltCap Infrastructure Fund Partner.

‘BaltCap is the largest private equity manager in the Baltics with an impressive investment portfolio and significant value add. Attracting BInF with its strong institutional investor base as a long term partner in Anaerobic Holding will enable us to finance future developments in renewable energy field,’ said Nils Aleksa.

‘This is the first case in Latvia where the pension savings of a large part of the Latvian and Baltic population will directly benefit from the investment in the local renewable energy infrastructure. We hope this will facilitate further pension saving investments in the local economies,’ comments Matīss Paegle, BInF Investment Director in Latvia.

It is the second BInF investment this year. In November the fund signed engineering, procurement and construction (EPC) contract to develop 48MW biomass plant in Vilnius. The plant should be built and become operational in the first quarter of 2019. According to estimation, the biomass plant will generate nearly 10% of Vilnius heat demand.

In July 2017, BaltCap launched BaltCap Infrastructure Fund (BInF) with the planned size of €100 million. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.

Investors of BaltCap Infrastructure Fund include all of the biggest pension funds of the Baltic states, a life insurance company, and international financial institutions. 60% of the funds are raised from the pension funds of Lithuania, Latvia, and Estonia – it is the largest combined local pension funds commitment to the Baltics-focused private equity fund to date. The anchor investor of the fund is the European Investment Bank, which has commited to invest €20 million. This EIB support is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe launched to overcome the current investment gap in the EU by mobilising private financing for strategic investments.

Additional information:

Šarūnas Stepukonis
Partner

BaltCap Infrastructure Fund

sarunas.stepukonis@baltcap.com

Tel.: +37068666201

Matiss Paegle

Investment Director

matiss.paegle@baltcap.com

Tel.: +37126688868

First project of BaltCap Infrastructure Fund: a EUR 16 million biomass plant

Sep 2017/in Infrastructure /by Riin Savi

Today BaltCap Infrastructure Fund (BInF) signed an engineering, procurement and construction (EPC) contract with Axis Technologies to develop the first infrastructure project financed by BInF – a 48MW biomass plant in Vilnius. The deal has been signed in Vilnius during the Pan-Baltic Infrastructure Summit 2017.

EPC agreement, worth Eur 16 million, states that a 48MW biomass plant near Gariūnai should be built and become operational by the beginning of 2019. According to estimates, this power plant will generate nearly 10% of Vilnius heat demand.

“Advanced pipeline of potential infrastructure investments accumulated over the last few years enabled us to sign the first transaction right after the first close of BInF. This new biomass plant will change the balance of the heat supply in Lithuania’s capital – after its commissioning over half of required heat supply in Vilnius will be produced from renewable sources. The biomass plant will be built without any subsidies and it will also let to reduce heating prices and CO2 emisions in Vilnius,” said Šarūnas Stepukonis, the Partner of BaltCap Infrastructure Fund.

Heat energy in the plant will be produced by two water heating boilers of 19.5MW nominal thermalcapacity, as well as two 4.75MW flue gas condensing economizers. A double flue gas cleaning system using multicyclone and electrostatic precipitator will be installed in the plant.

In July 2017, BaltCap launched BaltCap Infrastructure Fund (BInF) with the planned size of €100 million. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.

Investors of the BInF include all of the biggest pension funds of the Baltics, a life insurance company and international financial institutions. 60% of the funds are raised from the pension funds of Lithuania, Latvia, and Estonia – it is the largest combined local pension funds commitment to the Baltics-focused private equity fund to date. The anchor investor of BInF is the European Investment Bank that has commited to invest €20 million. This EIB support is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe launched to overcome the current invetsment gap in the EU by mobilising private financing for strategic investments.

Contacts for enquiries:

Sarunas Stepukonis

BaltCap
Partner of BaltCap Infrastructure Fund

Tel: +370 5254 6713

sarunas.stepukonis@baltcap.com

€100 million BaltCap fund will invest into infrastructure of the Baltic States

Jul 2017/in Infrastructure /by Riin Savi

BaltCap, the largest private equity investor in the Baltic region, has launched BaltCap Infrastructure Fund (BIF) with the planned size of €100 million. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.

BaltCap Infrastructure Fund will primarily focus on providing development capital for transport, energy, and energy efficiency infrastructure projects in the Baltic States.

“Infrastructure development is one of the key priority areas for the region to improve its competitiveness and independency. Baltic countries are facing infrastructure funding gap of €6 billion over the next 5 years which is expected to become even larger post 2014-2020 EU funding program. Physical infrastructure such as electricity, heating, railways, roads, ports and airports suffer from a substantial deficit in terms of capacities and efficiencies,” says BaltCap Infrastructure Fund partner Šarūnas Stepukonis.

“With the strong support from international financial institutions and local pension funds we are able to address the infrastructure funding gap and help Lithuania, Latvia and Estonia to realise their infrastructure investments programs. It is the first time in the region when the local pension fund assets will be deployed to develop infrastructure for future generations,” added Stepukonis about the purpose to launch a new fund.

The anchor investor of the fund is the European Investment Bank, which has commited to invest €20 million into the fund. This EIB support is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe launched to overcome the current invetsment gap in the EU by mobilising private financing for strategic investments.

Vice-President Ambroise Fayolle, whose responsibilities include EFSI, said, “Mobilising private financing for strategic investments is the main goal for EFSI and we welcome therefore the cooperation with the BaltCap Infrastructure Fund, as it is the first infrastructure fund in the Baltics with the goal to catalyse private investors to finance infrastructure projects. This Fund is an answer to the rising investment needs in transport, energy efficiency, and renewable energy sectors in the region. Particularly, it addresses the continuing and potentially growing demand for equity capital for the implementation of infrastructure projects. It thus encourages economic growth by promoting the competitiveness of the Baltic region and improving the business environment. What is equally important, the fund will create new jobs and by its focus on renewable energy and energy efficiency – significantly contribute to the climate change agenda.”

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said, “Investment in infrastructure in Europe is improving, but we still need to do more. This agreement to support the BaltCap Infrastructure Fund is a positive example of what we can do through the EFSI in order to mobilise such investments. I am particularly pleased that this agreement will support projects involving energy infrastructure, renewable energy and energy efficiency. By supporting investments in these sectors, we are helping to lay the foundation for future economic growth.”

“We are very honoured to be able to contribute to this important infrastructure fund which will benefit the economic and environmental development in all three Baltic states. From 1990, NEFCO has financed over 100 environmental projects in the region within the public and private sectors. This equity investment is, however, our first project in the Baltic States after re-entering that market recently, and we are especially pleased that the projects involve all three Baltic States: Estonia, Latvia and Lithuania,” says NEFCO’s Executive Vice President Kari Homanen.

BaltCap exits wind farms in Lithuania and Estonia to Lietuvos energija

Jan 2016/in Buyout, Growth, Infrastructure /by Riin Savi

BaltCap, the largest private equity and venture capital investor in the Baltics, exited 18MW Tuuleenergia wind farm in Estonia and 24MW Eurakras wind farm in Lithuania. These wind farms were acquired by Lietuvos energija, Lithuanian state-owned energy group.

“BaltCap has always believed in the future of green energy and the wind farm investments matched well our investment criteria,” said Peeter Saks, Managing Partner of BaltCap. “As a private equity investor, our task was to be engaged in these projects during the development phase which was successfully completed in 2015 when both wind farms were commissioned. Lietuvos energija as a strategic investor with a long-term view on energy market was a natural buyer for these assets.”

“Mäli and Tamba villages enjoy one of the best wind conditions in Estonia,” said BaltCap’s Investment Director Kristjan Kalda. “Combined with the right choice of techology, the wind farm had the best load factor in Estonia last year.”

“This transaction marks the first exit of BaltCap Lithuania SME Fund, part of JEREMIE initiative in Lithuania. Strong and experienced team of co-investors and management played a key role to a successful wind farm development in Jurbarkas. It is within our expectations that the experience gained in this project will translate into new pan-Baltic infrastructure investments,” said Šarūnas Stepukonis, Associate Director at BaltCap.

“One of the strategic directions of Lietuvos energija is the development of production and diversification. Naturally, in assessing the current environment and future prospects, we chose wind energy as one of the development directions. Analyzing the market, next to the development projects we have discussed opportunities to acquire already existing wind power parks. We are pleased that after a market survey and identification of opportunities we successfully managed to acquire two wind parks. It is the first wind power capacity of Lietuvos energija and also first investment outside Lithuania – in Estonia,” says Dr. Dalius Misiūnas, Chairman of the Board and CEO of Lietuvos energija.

Lithuanian company Eurakras operates 24 MW wind farm in Jurbarkas district. Wind turbines are produced by German company Nordex. Each power plant has 3 MW capacity and tower height of 120 meters. The wind farm is brand new – construction completion certificate and authorization to produce electricity were issued in December 2015. BaltCap was investor in Eurakras through Lithuania SME Fund.

Estonian company Tuuleenergia operates 18 MW wind farm in Mäli and Tamba in Varbla parish, western Estonia. All six wind turbines are manufactured by German company Enercon. Each power plant has 3MW capacity and tower height of 99 meters. The wind farm was launched in the beginning of 2015. BaltCap was investor in Tuuleenergia through BaltCap Private Equity Fund.

Total transaction price for Lietuvos Energija was €28 million for 100% share in Tuuleenergia and 75% share in Eurakras, including buy-out of BaltCap´s co-investors. In Tuuleenergia transaction BaltCap was advised by corporate finance firm Superia and law office RASK.

Lithuania SME Fund is a growth capital fund organized by BaltCap in 2010 as part of the JEREMIE initiative in Lithuania. JEREMIE Holding Fund in Lithuania managed by EIF is financed from the EU Structural Funds under 2007-2013 Economic Growth Operational Programme.

For further information:

Kristjan Kalda

Investment Director

Tel: +372 665 0280

kristjan.kalda@baltcap.com

Tel: +370 5 278 2042

Mob: +370 611 43 548

ernesta.dapkiene@le.lt

Ernesta Dapkienė

Director of the Corporate

Communication Service of Lietuvos energija

Sarunas Stepukonis

Associate Director

Tel: +370 5 254 6713

sarunas.stepukonis@baltcap.com