HELSINKI, May 18, 2020 (Press Release) -UPM Energy and the City of Kajaani have negotiated an agreement, according to which, UPM Energy Oy will sell its 50% share in Kainuun Voima Oy to Kajaanin Energiatuotanto Oy, owned by the City of Kajaani. In addition to the share capital, UPM Energy's customer agreements specified in the deed of sale and the related rights and obligations (steam supply and sales agreements) will be transferred to Kajaanin Energiantuotanto in connection with the transaction.
In addition, in connection with the share transaction in Kainuun Voima Oy, the City of Kajaani will acquire five properties owned by UPM Energy Oy and UPM-Kymmene Corporation, whose hydropower and land will be used in Kainuun Voima's hydropower production on the basis of a lease agreement. The lease agreement between the property owners and Kainuun Voima for the lease of water and land will be transferred to the City of Kajaani.
The total amount of share and real estate transactions is EUR 19 million. Kajaani City Council approved the deals at its meeting today.
“Following the closure of the paper mill in 2008, the strategic importance of Kainuun Voima's ownership to UPM has decreased significantly. The transaction is an excellent service to both parties' long-term goals in energy production, ”says Ari Henriksson, Director, Generation Asset Management at UPM Energy.
The City of Kajaani and, at the time, Kajaani Oy founded Kainuun Voima Oy in 1986. Kainuun Voima owns a thermal power plant built in Tihisenniemi, near the former paper mill, and three hydropower plants located on the Kajaani River. The company produces electricity, heat and process steam on the Mankala principle, ie it sells and delivers the energy it produces at cost to its owners in proportion to their holdings.
UPM Energy is a significant operator in the Nordic electricity market. With the total electricity generation capacity of 1,500 MW UPM Energy is the second largest electricity producer in Finland. Our business includes electricity generation and operations in both physical electricity and financial portfolio management as well as services to industrial electricity consumers and producers. UPM Energy employs approximately 60 energy professionals. www.upmenergy.com
We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 18,700 people worldwide and our annual sales are approximately EUR 10.2 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore – Beyond fossils.