Baltic renewable energy leader raises €300M in debt financing to boost energy security

Sunly, a Tallinn-based renewable energy producer, has secured €300 million in debt financing to accelerate its renewable energy projects across the Baltics and Poland. The funding was led by Rivage Investment through its high-yield infrastructure debt funds, Copenhagen Infrastructure Partners (CIP) via its Green Credit Fund I, and Norway’s largest pension company, Kommunal Landspensjonskasse (KLP), through CIP-managed funds. Sunly will use the funds to construct 1.3 GW of solar, wind, and hybrid parks, enhancing regional energy security and reducing reliance on imported fossil fuels. This investment supports Sunly’s mission to spearhead the energy transition in these regions, contributing to Europe’s broader decarbonization goals.

As the EU actively works on reducing its dependance on Russian gas, it faces ongoing challenges. Despite efforts to decrease reliance, EU countries imported around 30% more natural gas from Russia in May 2024 compared to than in September 2022, reports Clean Energy Wire. In the Baltic states and Poland, Russia’s significant influence in the regional energy market has historically exposed these areas to price fluctuations and supply disruptions associated with geopolitical tensions, often leading to higher energy costs for consumers than in other European nations. The upcoming desynchronization from the Russian and Belarusian electricity grid in February next year is intended to boost regional energy independence and security.

​Priit Lepasepp, co-founder and CEO of Sunly, said: “This investment enables us to improve our infrastructure with new grid connections and solar parks in the Baltics, which will support our onshore wind and storage pipeline expansion. To help reduce energy costs, our focus will be on two key areas: building a hybrid pipeline with storage capabilities and advancing the electrification of heating and mobility systems, thereby diminishing our reliance on imported fossil fuels and optimising the use of local renewable resources”.

Sunly intends to develop integrated hybrid parks that combine wind, solar and energy storage batteries at single connection point and direct line to consumers. This method improves energy production stability in various weather conditions and optimises cost-efficiency by reducing grid connectivity charges – forecasted to account to more than half of the total energy cost. The approach is expected to significantly benefit consumers, particularly large industrial clients with high energy consumption, by enhancing regional energy security and operational efficiency.

​Gaétane Tracz, Partner and Head of the Infrastructure Debt team at Rivage, said: “We are delighted to support Sunly’s strong leadership team through their ambitious growth trajectory and to help accelerate the construction of hybrid renewable energy parks across the Baltics and Poland. We share Sunly’s mission of contributing to produce power with purpose, to contribute to European Union energy security and to deliver investments with both attractive performance and ESG impact.”

​Jakob Groot, Partner at CIP and Co-Head of the CI Green Credit Fund I, said: “We are very excited to start our partnership with Sunly, and their highly experienced management team. This financing package will contribute significantly to the development and construction of renewable energy projects, supporting the decarbonization ambitions across the Baltics and Poland, and represents an attractive investment for our Green Credit Fund I”.

​Oliver Siem, Director, Investments and Operations at Kommunal Landspensjonskasse (KLP), said: “We are yet again pleased to be invited as a co-investor in a renewable energy project in Poland and the Baltics through our longstanding relationship with CIP. This is one of many steps in reaching our goal of being Paris aligned by 2050.”

One of the first projects to benefit from this financing is the 244 MW Risti solar park in Estonia, which can cover the annual electricity consumption of 55,000 households. Currently intended as a hybrid park, Sunly already has expansion plans that include onshore wind turbines and battery storage in the future.

Construction will also immediately start on four solar parks in Latvia, with a combined capacity of 553 MW. These Latvian parks are also designed as hybrids, with eventual plans to integrate wind or battery storage, or a combination of both. The 1.3 GW portfolio also includes several large hybrid solar parks in Lithuania, as well as both small and large solar parks in Poland by end of 2026.

With this investment Sunly’s expansion has been backed by a total of €765 million debt and equity capital from investors, including French fund Mirova, the European Bank for Reconstruction and Development (EBRD), and various banks. In 2023, Sunly successfully raised approximately €200 million from its existing investors, the Mirova, and EBRD to further develop and construct solar and wind parks across Estonia, Latvia, Lithuania, and Poland.

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