Wind power projects developed by Enersense’s subsidiary Megatuuli Oy and its partner are progressing – Megatuuli has agreed on a fee under a development cooperation agreement

Wind power projects developed by Megatuuli Oy (“Megatuuli”), a subsidiary of Enersense International Plc (“Enersense”), a provider of zero-emission energy solutions, and its key project development partner, have been decided to be constructed subject to fulfilment of certain preconditions. The decisions, if implemented, entitle Megatuuli to a fee which is payable in instalments over the years 2022–2025, based on a development agreement between Megatuuli and the development partner.  In the year 2022, this would have an impact of EUR 5-6 million on Enersense’s EBIT. In addition, Enersense estimates, as an update to the previously announced estimation, that the aggregate revenues from the aforesaid projects, if implemented, and certain other projects, which are the subject of the series of non-voting Megatuuli shares will have a EUR 30–40 million impact on Enersense’ EBIT by 2025. The profits of the projects will be distributed between Enersense and the holders of Megatuuli’s non-voting shares.

The implementation of the construction phase is conditional on the fulfilment of certain customary preconditions agreed by Megatuuli’s development partner. These preconditions are expected to be fulfilled in February 2022.

Megatuuli was responsible for the initial project development phases of the projects, including among other things preparing feasibility studies, securing land leases as well as zoning, environmental impact assessment and building permit processes to “ready to build” phase. In other respects, the development phase has been carried out by Megatuuli’s development partner.

Vice President, Wind Power Development, Lauri Lammivaara, Enersense International Plc:

“The development of a wind farm is a long-term process. Megatuuli has been working well with the local residents, landowners and partners for several years now. The positive impacts of wind power to the society are significant and thus it is great to be part of the creation of a zero-emission society. Special thanks goes also to the competent and energetic wind power team of Megatuuli who has enabled this.”

CEO, Jussi Holopainen, Enersense International Oyj:

“The wind farm projects are a good example of the responsible, high-quality and long-term development of wind power projects by Megatuuli and its partners. After the acquisition of Megatuuli, Enersense now has new, experienced and visionary experts to develop our services and our understanding and expertise across the entire wind energy value chain. Onshore wind power production in Finland will increase many times over in the coming years, and I look forward to seeing new wind power projects making progress.”

The payment of the fee is conditional on the completion of certain phases in the construction and electrification of the projects and realisation and timing of the payments may therefore be beyond the control of Megatuuli and Enersense. In addition, Megatuuli has agreed on customary provisions relating to the liability on its work and to pay significant contractual penalties in the event that certain implementation phases of the projects will be delayed due to reasons attributable to its scope of work.  

On 20 December 2021, Enersense announced that it had signed an agreement to acquire Megatuuli Oy, a development company for onshore wind power projects. Enersense announced the closing of the transaction on 1 February 2022. At the same time, Enersense announced that the acquisition is expected to improve Enersense’s financial position in 2022 and the company’s performance over the long term. The revenues from certain future projects which are the subject of the series of non-voting Megatuuli shares were then estimated to have a EUR 20–40 million impact on Enersense’ EBIT by 2025. In terms of distributable net profit, Enersense’s share of the said amount, including the amount realised from the aforesaid projects potentially progressing to the construction phase, is expected to be around one third and the share of the non-voting shares held by the sellers around two thirds. The first projects were expected to generate revenues during 2022. For Megatuuli’s other projects, which are expected to provide revenues from 2024 onwards, Enersense’s share of net profit is 100 per cent for the financial year.