Energy company Gren has signed an agreement to acquire the district heating company ESRO, marking the next step in Gren’s ambitious growth plans in Estonia. The completion of the transaction is subject to approval by the Competition Authority and by the Consumer Protection and Technical Regulatory Authority in Estonia.

ESRO AS is an energy company primarily engaged in the production, distribution, and sale of thermal energy in the town of Viljandi and Jämejala village in the Viljandi municipality.

Margo Külaots, Head of Gren in Estonia, stated: “For over 20 years, we have been developing district heating services for customers in Pärnu and Tartu, and for the past two years, we have managed the district heating network in the Kohtla-Järve, Jõhvi, and Ahtme areas. We have converted the district heating systems in both Tartu and Pärnu to local biofuels, established efficient combined heat and power plants, continuously modernized district heating networks in all three areas, and expanded them by connecting new customers. We were the first in the Baltics to introduce a new service—district cooling—which now operates in both Tartu and Pärnu. We are confident that our extensive experience will bring positive developments and new services to the residents and businesses of Viljandi as well. Viljandi is a beautiful and developing town, and our goal is to provide reliable, affordable, and convenient thermal energy for Viljandi area, and in the future, possibly district cooling as well. We are always open to innovative ideas and solutions.”

Ilkka Niiranen, Gren’s CEO, comments: “Gren focuses on developing and providing sustainable energy solutions, mainly district heating. District heating is the most effective solution to provide essential heat for communities like Viljandi, and we are happy to grow our business in the Viljandi district heating system. The acquisition is in line with Gren’s strategy and goals.”

Jaan Saar, Chairman of the Management Board of ESRO AS: “After more than 30 years of providing and developing district heating in the town of Viljandi and its surroundings, the decision to exit the business was not easy. Over these years, in cooperation with the Viljandi town government, we have elevated the district heating management of Viljandi to a new level. Today, nearly 90 percent of our more than 50-kilometer heating network is covered with modern pre-insulated pipes. The company’s three separate heating plants are connected into a unified district heating network, managed by computer. Currently, we produce the majority of the region’s heat demand with wood chips, which has earned the company an efficient district heating certificate. Our latest major investment involves installing electrostatic filters on wood chip boilers to clean the exhaust gases. I believe we have found a worthy successor in Gren, who will continue to develop the company and offer new opportunities and solutions to the residents and businesses of Viljandi. We sincerely thank the town of Viljandi and our loyal customers, with whom it has been a pleasure to work, as well as all our dedicated employees whose contributions have been the key to the company’s success.”

Gren was advised by Ellex, Sweco and KPMG during the transaction process, while Prudentia and Widen advised ESRO AS. The transaction value will not be disclosed.

Gren develops green energy projects in Estonia, Finland, Sweden, Latvia, Lithuania, and the United Kingdom, ranging from environmentally friendly district heating and cooling to renewable energy-based industrial energy solutions. In Estonia, Gren operates in Tartu, Pärnu, and the Ida-Viru County areas of Jõhvi, Kohtla-Järve, and Ahtme, with a total of approximately 150 employees across three companies. In 2023, Gren sold 1,049 GWh of thermal energy, 12 GWh of cooling, and 243 GWh of electricity in Estonia. Gren’s Estonian companies are certified for compliance with the ISO 9001, ISO 14001, and ISO 45001 management system standards.

Photo credits: Siim Verner Teder (visitviljandi.ee)