Heating company attracts investors

TALLINN - The heating company Tallinna Soojus, which warms up about 71 percent of the Estonian capital, has attracted the interest of the Swedish energy company Vattenfall.

Sten Soderstrom, managing director of Vattenfall's Estonian subsidiary, met with Tallinn's Deputy Mayor Ants Leemets Oct. 12. Soderstrom said Vattenfall wants to invest in Tallinna Soojus, which is owned by Tallinn's municipality.

Leemets said the Finnish company Imatran Voima has expressed similar interest. "It's very good that the region's leading energy companies are ready to invest in Tallinna Soojus, which is financially in a relatively bad shape due to the inefficiency of the systems inherited from its Soviet-era predecessor," Leemets told the Baltic News Service.

Tallinna Soojus earned an 11-million-kroon ($843,000) profit on a 759-million-kroon turnover in 1997. "The company's financial situation has been stable, but the 1997 profit is just enough to cover the losses from the year before," said Leonid Lipavski, Tallinna Soojus board director.

Lipavski said the company's financial situation is not as bad as Leemets stated.

"In 1997, we invested 121 million kroons in reconstruction and renewal as well as in the enhancement of efficiency of the systems," he commented.

The heating utility's modernization program, which has been implemented for three years, has already brought some results. "The expenditure on fuel, electricity and water has been reduced substantially, while improved efficiency has maintained the amount of warmth produced at the same level," Lipavski said.

Tallinna Soojus, which has a stock capital of 718 million kroons, has attracted the interest of various companies in addition to Imatran Voima and Vattenfall. "Potential investors could include Finnish Helsinkin Energia, Danish SK Power and German Preussen Elektra as well," Lipavski said.