BaltCap Infrastructure Fund II has acquired VKG Elektrivõrgud, Estonia's second largest regulated electricity distribution operator, to enhance infrastructure resilience and expand service offerings in the industrially significant Ida-Virumaa region.

Target Information

VKG Elektrivõrgud is the second largest regulated electricity distribution network operator in Estonia, following Elektrilevi, which is owned by the state. The company operates in northeastern Estonia, particularly in the towns of Narva, Narva-Jõesuu, and Sillamäe, serving a population of approximately 71,000 residents, alongside significant industrial activities in the region. In 2022, VKG Elektrivõrgud reported an annual electricity distribution volume of around 250,000 MWh. Its infrastructure comprises 946 kilometers of power lines and 374 substations, encompassing low, medium, and high voltage services.

Industry Overview in Estonia

Estonia's electricity sector plays a crucial role in supporting the country's economy and industrial base. The industry is characterized by a mix of deregulated energy markets and regulated distribution networks, with a strong focus on modernizing infrastructure to meet the growing demands of consumers and businesses alike. Estonia is also placing increasing emphasis on integrating renewable energy sources to enhance its energy resilience and sustainability.

In recent years, the Estonian government has been actively working towards ensuring energy security through incentives for renewable energy projects and investment in smart grid technologi