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German energy company Danpower Group is acquiring a majority stake in SW Energia OÜ, one of Estonia’s leading district heating providers, says the official press-release. Danpower Group is a Potsdam-based energy company specializing in district heating and renewable energy solutions for municipalities, industries, and residential areas across Germany and now Estonia.
The deal, signed on January 27, awaits approval from the Estonian Competition Authority and aims to accelerate the transition to renewable energy in Estonia’s heating sector.
Why Estonia
Burkhard Vogel, board member of Danpower Eesti AS, points to Estonia’s business-friendly environment as a key factor in the investment. “We feel at home in Estonia and in many respects even see advantages here compared to our home market Germany,” he said, citing the country’s stable investment climate and supportive tax system.
Danpower first entered Estonia in 2012 and has since become an active local contributor, creating jobs in Võru including a German-language customer service centre, and supporting local sports and Defence League activities.
SW Energia, founded in 1999, operates 65 district heating networks across Estonia, providing complete heating services from production to network operation while steadily increasing its renewable energy share.
Danpower, SW Energia representatives together with Enterprise Estonia’s Foreign Investment Adviser in Germany, Riina Leminsky
Enterprise Estonia, the country’s investment promotion agency, has played a crucial role in facilitating the company’s operations and helping establish key connections. “From the very beginning, we have felt welcome in Estonia. The Enterprise Estonia has been at our side, helping us establish important contacts in both political and business circles,” Vogel noted.
Riina Leminsky, Foreign Investment Adviser in Germany at the Enterprise Estonia, describes Danpower’s investment as long-term and responsible.
“My cooperation with Danpower began already during the investor search phase and included preparing and implementing the investment decision. Even after the transaction, I have continued to support the company’s expansion and help resolve challenges in cooperation with state and local institutions,” Leminsky said, adding that this long-term cooperation has given a new boost to the company’s growth.
What comes next
Very little in day-to-day operations will change for SW Energia, per official statement. The company’s founder and CEO Allan Aas will remain in their positions, and the brand stays unchanged. However, SW Energia gains access to international expertise and additional capital to fund its growth ambitions.
“This step gives us a clear competitive advantage and enables us to do things faster, on a larger scale and more innovatively,” Aas explained. The company plans to invest more heavily in renewable energy and expand its use of domestic wood chips for heating.
