Energy, Estonia, Legislation, Mergers and take-overs

The cost for which the company, called Elekter ja Küte, bought the two firms from Dalkia was 80 million euros. The transaction, financed by Swedbank and SEB, will come in force after the preliminary conditions stipulated in the contract are fulfilled.

Priidu Nõmm will continue to be the chairman of Tallinna Küte ning Eraküte boards; Kristjan Rahu will become the companies' council chairman.

Rahu said that the companies will continue working without major changes. "Over the years the companies' management has worked to raise effectiveness of the companies and guarantee modern level heating supply. In global scope, the energy sector needs investments and things are not different here. Consolidation of the sector is vitally necessary," said Rahu.

Rahu said that it is important to increase the share of local fuel in heating production and next year, the company will buy more heating produced of waste and biomass, that is by nearly a fifth cheaper than the heating produced of natural gas.

Tallinna Küte supplies with central heating two thirds of Estonian capital Tallinn and the town of Maardu. It manages the city's 415 km central heating network, three big boiler houses and 24 small boiler houses. AS Eraküte supplies with heating 8 Estonian towns.

Kristjan Rahu's company Horn Invest OÜ bought last year from Dalkia a 85% stake in the Väo heating and electricity station.