Tallinn City and Utilitas have completed the establishment of AS Utilitas Tallinna Soojus
Tallinn City and OÜ Utilitas have received approval from the Competition Authority to establish a joint venture in the district heating sector called AS Utilitas Tallinna Soojus. They have also signed share transfer agreements. The company will be 33.34% owned by Tallinn City and 66.66% by Utilitas.
The establishment of AS Utilitas Tallinna Soojus was approved by the Tallinn City Council in June of this year.
Tallinn Mayor Mihhail Kõlvart noted that the process of establishing the joint venture between Tallinn City and OÜ Utilitas has now been completed. He mentioned that the joint venture will implement agreed investments with a strong focus on developing environmentally-friendly heating systems. The aim of Tallinn is to transition to carbon-neutral district heating as quickly as possible, a goal also outlined in Tallinn’s 2035 development plan. Kõlvart explained that the joint venture will invest in sewage and seawater heat pumps, which will help reduce the proportion of natural gas used for heat production to less than 10% of the total by 2027. The initiative will also reduce the use of fossil fuels. Replacing old non-insulated district heating pipelines with modern solutions by 2035 are also planned, thus reducing heat losses to below 10%.
Tallinn’s strategic goal is to ensure the availability of environmentally-friendly district heating solutions and the functionality of essential services within the city’s territory. This requires continuous modernization of the district heating network and substantial investments.
Priit Koit, the CEO of the Utilitas Group, added that carbon-neutral district heating is both more environmentally friendly and offers customers more stable prices. He mentioned that Tallinn already has a modern district heating system where over two-thirds of the energy comes from local and renewable sources. “The sooner we reduce the share of imported fossil fuels to a minimum, the less dependent we are on geopolitical risks, which impact we have seen on fuel supply and prices recently. We have made significant progress in reducing our carbon footprint through years of work, and our goal is to make our entire company’s operations carbon-neutral by no later than 2030,” Koit added.
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.