Aidu Wind Farm Finalises Capital Raising for EUR 150 million Investment Grade Dark Green Bond on Frankfurt Stock Exchange

  • Financing the final phase of 100MW onshore wind farm in Estonia, Europe
  • Investment Grade, Dark Green, SFDR article 9 classification
  • Estonia’s highest rated international bond, first ever international green bond

Tallinn, Estonia – July XX, 2022
Aidu Wind Farm (“Aidu”) is finalising capital raising for a EUR 150 million investment grade green bond to finance the final phase of a 100MW wind farm, led Eleon AS, an Estonia-based renewables technology innovation group.

Key Facts about the Bond

Rating: BBB+
SFDR: Article 9
Second Party Opinion: Dark Green
Issue Size: EUR 150 Million
Duration: 12 Years
Yield: 5% + Capital Repayment
Listing: Frankfurt Stock Exchange
Senior Secured: Yes

The bond has been issued by Sustainable Capital PLC, a green bond issuance platform recognised on the Nasdaq Sustainability-Bond Network, and structured by U.K. based Bedford Row Capital PLC, a global non-bank structuring specialist. The wind farm is in its final phase of development including grid connectivity with groundworks and infrastructure already completed. The project also benefits from a fixed price EPC Contract (Engineering, Procurement, Construction Costs) and is fully permitted.  Aidu has received a BBB+ investment grade rating (Stable) from credit rating agency EuroRatingTM based on the high DSCR (average of  2.46) and the security of the PPAs, which are made up of a fixed-rate Estonian government (AA- stable outlook) subsidy at €53.7/MWh as well as the Nordpool market price (June average price 178 MWh).

The green bond has also received a ‘Dark Green’ Second Party Opinion and SFDR ‘Article 9’ classification by CICERO based on the Environmental Impact Assessments (EIA) undertaken the biodiversity and local impacts being considered. As Aidu is being built on land previously degraded by shale oil mining activities, the local community has reacted positively to the new, greener activity.  This makes Aidu the highest rated international bond coming out of Estonia and the first international green bond from Estonia.

Andreas Sõnajalg, CEO of Eleon AS, said: “To meet the IEA’s net zero by 2050 targets, wind power must increase 11-fold between now and 2050. Aidu is a huge step in that direction – upon completion Aidu will become the largest onshore wind farm in the Baltics and a key contributor of renewable energy to Europe’s leading energy market, Nordpool.”

Dr Scott Levy, CEO of Bedford Row Capital, commented: “With the E.U wanting to reduce foreign gas imports by 2/3 this year and gain independence from them entirely by 2027, Aidu’s clean energy is key to Europe’s long-term energy freedom from both fossil fuels and foreign imports.”

Notes to Editors

This announcement does not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. An offer or solicitation will be made only through an investment memorandum and other related documents with respect to a particular investment opportunity, and will be subject to the terms and conditions contained in such documents.

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About Eleon AS

Eleon AS (“Eleon”) is an Estonian-based energy company established in 2007 focusing on renewable energy, mostly from wind farms, as well as the manufacturing of wind turbines. The company has three wind farms in operation, totalling 14 MW, and four under development, including one offshore, totalling approximately 1,500 MW. Proceeds under the framework will exclusively finance the development, construction, and operation of Aidu wind farm located in North-East Estonia. This project will comprise 28 turbines of 3.4 MW each and will have a production total capacity of 100 MW. All the wind turbines will be manufactured by Eleon.

About the Issuer

Sustainable Capital PLC is a UK-based green bond issuance platform (recognised on the Nasdaq Sustainability-Bond Network) which offers a flexible, quick to market solution for green and sustainable businesses. Sustainable Capital PLC is a cost-efficient solution for high impact projects which comply with international green bond standards.

For more information, please contact: 

About Bedford Row Capital

Bedford Row Capital (“BRC”) is an award-winning provider of global structured securities solutions which includes the issuance of investment-grade bonds, green bonds, senior secured conventional debt, short-dated notes, delta-one trackers and Shariah compliant certificates. The use of standard settlement infrastructure, combined with Bedford Row’s proprietary information systems, offers an innovative level of transparency and security for both issuers and investors. In a fast-growing market, Bedford Row is ranked inside the top 100 originators globally and one of the leading non-banks in the market.

For more information, please contact: 

Eleon wind turbines outperformed offshore wind turbines in 2019

In 2019, Estonian renewable energy company Eesti Elekter produced 18 gigawatt-hours of electricity in the Salme wind farm, which is 10% more than in the previous year. The majority of Salme’s production came from the Eleon 3M116, a 3 megawatt wind turbine based on Eleon technology, with an efficiency of 45.3 percent.

According to Oleg Sõnajalg, Member of the Management Board of Eesti Elekter, two thirds of the output of the Salme wind farm came from the Eleon multimegawatt-class wind turbine last year. “Last year, the Eleon prototype windmill generated 11.915 million kilowatt-hours of electricity, and the efficiency of the wind turbine reached 45.34 percent, which is considered a very good indicator, even for offshore wind farms. As far as we know, no other wind turbine in Estonia has achieved such efficiency,” said Sõnajalg.
Over 45% efficiency onshore wind farms can profitably generate electricity without the support of renewable energy.

According to Sõnajalg, it is good to compare wind turbines based on different technologies in the Salme wind farm, as the company operates not only the Eleon prototype wind turbine but also the Enercon and Vestas wind turbines. “The Eleon prototype produced 3,972 MWh per unit of power, which is 1.95 times better than other Enercon and Vestas wind turbines in the same park, which means the Eleon wind turbine 95% more productive last year – confirming once again that Eleon’s wind technology can successfully can compete with global wind turbine manufacturers.”
There are newer versions of the Enercon and Vesta models than thone in the Salme wind park, but on average, the Eleon wind turbine is 30% more efficient. This is thanks to patented technology that allows to build significantly lighter, taller and larger blades than any other wind turbine manufacturer.

Eleon’s direct drive wind turbine is based on a single-sided supported direct drive (SSDD) invention. The SSDD solves the challenging air gap problem of direct drive wind turbines with a pioneering and unique method. The permanent magnet generator is enclosed in the tubular main frame and fixed by a single main bearing to the front end of the main frame, where the stator is connected to the outer ring and the rotor to the inner ring of the bearing. The generator structure floats, i.e. the complete generator might be deflected but not the air-gap. The hub is also connected directly to the main bearing. With this design the main loads are led from the hub through the main bearing directly to the main frame and, in turn, from the main frame to the tower. The invention protects the generator against harmful off-axial loads that may lead to structural deformations and problems with the air-gap. Mainly torque is transferred to the generator. The invention allows for a significant reduction of the nacelle dimensions and mass.

Eleon wind turbine reliability reached 99.62% last year, which is also above the average for other windmills worldwide. Competitive series wind turbines typically have a required reliability of 95%. For prototypes, 70% reliability is already considered a good result.

Eleon prototype wind turbine broke a production record in 2017

The Estonia-based multimegawatt-class Eleon prototype wind turbine, located in Salme Wind Park, broke the record in producing electrical energy in 2017 and as a result is capable of covering the yearly energy needs of more than 5,000 average home consumers.

The Eleon 3MW wind turbine produced a record 12.2 GWh of electricity. In the prior year, when wind conditions were less favorable, Eleon produced 11.1 GWh of electricity. The capacity factor for the Eleon wind turbine was 46.2%, which means that this kind of onshore wind turbine can successfully manage without feed-in tariff. The position of the wind power industry is that all wind turbines with a capacity factor over 45% are beneficial without feed-in tariffs, so Eleon is proud to announce the braking of this magical limit. “Until this day, there is no wind turbine that has been capable of such performance,” said Oleg Sõnajalg, board member of Eleon Ltd.

Serial production of Eleon-type wind generators has been launched in order to establish 30 units for Aidu Wind Farm. Based on the latest results with the Eleon prototype wind turbine, wind turbines at Aidu Wind Farm can produce electrical energy according to the market price. “As far as technology is concerned, Eleon has the capability of providing basic energy for all of Estonia, which has so far been dependent on non-environmentally friendly oil shale,” said Andres Sõnajalg, board member of Eleon Ltd.

Established in 2007, Eleon Ltd. is an Estonia-based technology innovation company focusing on multimegawatt-class direct drive wind turbine development and manufacturing. The first 180-meter Eleon-technology based 3M116 windmill was erected in 2013 at Saaremaa and successfully passed all grid tests. Serial production of wind turbines has been launched.

Eleon 3M116 Wind Turbine

Eleon bought a wind turbine blade factory from Finland

After year and a half of negotiations, Eleon has bought a Finnish wind turbine blade factory named Mervento, including all technology and fittings. The Finnish company itself only made it to the production of the first prototype. According to Oleg Sõnajalg, it was the closest factory to Eleon, and therefore a profitable purchase. Oleg and Andres Sõnajalg, founders of Eleon Ltd. are operating in order to launch recently purchased wind turbine blade factory at latest by the end of the year.

“We have had a long-term partnership with Finnish people, unfortunately their factory went bankrupt,” explained Andres Sõnajalg. “Their devices are suitable for our wind turbine blade production. By the autumn, we will move the equipment of the factory to Estonia. “The greatest phenomenon of bringing the wind turbine blade factory to Estonia is that, firstly, it is very labor intensive – it is handmade everywhere in the world,” described Andres Sõnajalg, co-founder of domestic windmill development company.

According to him, in this area there are already qualified people in Estonia. “All the luxury yachts are made from the same materials,” he explained. As a second important aspect, Sõnajalg brought out the transport costs, as bringing wind turbine blades from abroad should be considered with at least a 20-percent additional cost. “Not very large factories are established for the blades, but they are located next to the wind parks, to the point that removable factories will be created,” describes entrepreneur.

A technology company that operated aside the enterprise will help to put up the factory. This should take place in fall, as at the end of September Eleon Ltd. should bring the equipment of Mervento factory from Finland to Estonia.

“These type of factories will be built very quickly,” said Sõnajalg, pointing out that in a few months the factory would be up. The total territory would is estimated to be between two to three hectares. “With this equipment, in two shifts, it is possible to manufacture one blade per week, 52 blades or 17 sets of blades per year,” said Sõnajalg. As planning and calculations are still ongoing, he could not say the exact numbers of the workers yet, however depending on the volume of production, he predicts work places for a few fundred people.

By today, Oleg and Andres Sõnajalg have the signed all the necessary contracts for the construction of Aidu wind farm with total price of 165 millions. 70 percent of Eleon’s wind turbine components come from Estonian companies. These include ABB in Jüri, E-Profiil aside Tallinn, Remeks in Ida-Virumaa as well as many other smaller enterprises.


Eleon broke a production record

Estonian based technology multimegawatt-class wind turbine prototype Eleon, located in Saaremaa, Salme, broke a production record which can cover more than 2,800 of average home consumer yearly energy needs.

Despite last year’s bad wind conditions, Eleon 3MW wind turbine produced a record 11.3 GWh of electricity, which covered a total energy need of 2820 average home users. During the year before, which was better in terms of wind, Eleon produced 11.1 GWh of electricity, announced Eleon.

“These production figures could not be achieved if the wind turbine would not be constantly running. The availability of our wind turbine has been very high from the beginning but this year, it rose further to over 99%. This made us possible to produce even more energy in a year that was around 20% less windy,” said Oleg Sõnajalg, board member of Eleon Ltd.

The first 180-meter Eleon-technology based 3M116 windmill was erected in 2013, at Saaremaa. The windmill has successfully passed all grid testings, and a serial production will be launched. Serial production will take place in Aidu, Ida-Virumaa where also a 100MW capacity reference wind farm will be prepared in order to start the export of technology to foreign markets.

Established in 2007, Eleon Ltd. is an Estonian based technology innovation company focusing on multimegawatt-class direct drive wind turbines development and manufacturing.

Eleon 3M116 Wind Turbine

A new generation of wind turbines

There are around 200,000 wind turbines in the world. On average, twelve fires involving these turbines take place annually. It is up to each person to decide if this number is too high or not. However, it is a fact that we all consume electricity every day and electricity production with wind turbines is an efficient and environmentally friendly method.

The fire safety of wind turbines suddenly became a topical issue following a recent fire in Viru-Nigula. Since I am in charge of Eleon, a company that manufactures large wind turbines, and we are in the middle of installing a wind farm in Viru County, I consider it necessary to explain why it is completely out of the question that the new wind turbines will catch fire like this. Although an expert analysis will reveal the specific circumstances, which led to the fire in Viru-Nigula, I will try to shed light on the likely causes of the fire.

All big wind turbines appear to be very similar: at the top of a high, bright tower sits a white nacelle, to which three revolving rotor blades are attached. A wind turbine is a wind turbine, people think. That is in fact not the case, as wind turbines that appear to be quite similar employ a wide range of technologies.

Simply put, multi-megawatt wind turbines can be divided into two types: old-school wind turbines with a gearbox and wind turbines of the new generation that are highly efficient and mainly use direct drive. In the case of old-school wind turbines, three factors cause a fire hazard: both the medium voltage transformer and the power electronics, as they are both up in the nacelle, and the housing of the nacelle because it is made from fibreglass plastic, as well as the oil in the gearbox, which acts as a fuel in the event of a fire. The accident in Viru-Nigula likely became possible owing to a concurrence of these three factors.

The wind turbine in Viru-Nigula likely caught fire as a result of the following sequence of events. The medium voltage transformer installed in the nacelle at the top of the turbine, which is constantly shaken by strong winds, created an arc flame, which resulted in ignition. Oil that gushed out of the transformer caused the fire to spread. As the temperature rose, the fibreglass plastic nacelle also caught fire. Oil that poured out from the gearbox literally added more fuel to the fire.

This particular wind turbine (operated by Nelja Energia AS) was produced by Winwind OY, a Finnish manufacturer that went bankrupt in 2013. The technology used in this turbine is from the 1990s and did not meet either the modern safety or efficiency standards.

According to statistics, more than 80% of fire incidents involving wind turbines have originated from medium voltage transformers installed at the top of the tower. The reason is the fact that the nacelle of a wind turbine is constantly shaken by strong winds, which is a phenomenon that everybody who has flown into turbulence on a plane or been at sea during a storm has experienced.
In the course of time, however, constant shaking creates a situation where each detail that can become loose indeed does become loose. And everybody can guess what happens in a nacelle when a seven-ton transformer that operates at a thousand volts gets loose…

This rare but nonetheless dangerous sequence of events could not possibly unfold in wind turbines that belong to the new generation.

The medium voltage transformer in the new generation Eleon wind turbines developed in Estonia is, however, installed in special rooms on the basement floor separated by a firewall. When any devices catch fire in these rooms, the fire does not spread to the nacelle or other systems of the wind turbine. Additionally, the transformer is not exposed to any vibration or shaking on the basement floor. We do not know of any cases where a nacelle fire originated from the foot of a wind turbine.

The fact that the housing of the nacelle of an Eleon type wind turbine is not made from flammable plastic but from fireproof, two-centimetre-thick steel also increases fire safety by a significant degree. This arrangement prevents fire from moving outside of the wind turbine’s nacelle even if the fire does indeed break loose. Fibreglass plastic blades catching fire, which happened in Viru-Nigula, is also ruled out.

Thirdly, the new generation Eleon wind turbine uses direct drive. In other words, it is without a gearbox, which means that hundreds of litres of gearbox oil cannot be found at the top of the turbine, which would have an explosive effect in the event of a fire. These three upgrades alone increase the fire safety of our new generation wind turbines by a significant degree. Fire in a wind turbine is extremely rare and wind turbines are a safe and environmentally friendly choice compared to other possible sources of energy.

In addition to the higher safety standards of the new wind turbines, I would like to highlight another important aspect for the people of Estonia and, above all, the people of the Viru region – jobs. The production of Eleon wind turbines is currently distributed between several countries. We order over 10,000 components from more than ten countries. Our wish is to gradually make Estonia the centre of the production and assembly of the turbine’s components, thereby creating a completely new branch of industry here.

This planned full-scale wind turbine industry means an export turnover of several hundred million euros for Estonia and the creation of new jobs, predominantly in the counties of Lääne-Viru and Ida-Viru. It is vital that the unfortunate ignition of an old-school wind turbine would not tarnish the reputation of the entire industry.

Alas, accidents do happen. However, one does not need to be fearful of similar accidents happening to the new generation of wind turbines. Hundreds of engineers have worked hard on the development of this new generation of wind turbines to prevent such accidents. Wind turbines present a great opportunity for the residents of the Viru region.

Oleg Sõnajalg
Wind Technology Association, board member
AS Eleon, board member

The Aidu wind farm will be completed in 2019

According to Oleg Sõnajalg, board member of Eleon AS, the company developing the Aidu wind farm, the foundation of the first wind turbine is currently being poured. The wind turbine is expected to be erected by the end of the year. Sõnajalg says that the park as a whole should be completed in 2019.

“The Aidu wind farm will be made up of 30 wind turbines. Its construction is underway, two large substations have been completed,” said Sõnajalg at the Äripäev conference “Industry Business Plan 2017” (or “Tööstuse Äriplaan 2017” in Estonian). He added that the foundation of the first wind turbine is currently being poured and it should be erected by the end of the year. While people generally do not want to see wind turbines in their backyard, then according to Sõnajalg, wind farm developers are actually welcome in industrial regions, such as Aidu. “We are breathing life into these mined-out areas and creating new infrastructure,” he added.

Will the Eleon wind turbine become one of Estonia’s most expensive export products?

When the Estonian wind turbine manufacturer Eleon introduced its idea of launching mass production of multi-megawatt wind turbines nine years ago, many did not believe in the idea. According to Oleg Sõnajalg, board member of the company, there are now enough supporters who see value in establishing a new industry in Estonia.

You plan to establish a wind turbine industry in Ida-Viru County and thus create 1,400 jobs by 2020. Many companies complain that there is not enough skilled labour available. Are you sure that you will be able to employ 1,400 people?

There are plenty of good people in Ida-Viru County, and I am sure we will get the right people to the right positions. The sad truth is that official statistics say that there are twice as many unemployed people in Ida-Viru County as there are in Estonia on average. We understand the importance of creating new jobs in the county.

The creation of a wind turbine industry has been a subject of conversation for some time now. Your grand plan is to manufacture wind turbines, put them into operation, and then use this as a reference in the world?

Exactly. A functional reference wind farm is a necessary prerequisite for series production. To understand this market, one has to look at what the big countries all over the world are doing. Everybody is betting on wind.

The Paris Agreement suggests that a hundred billion dollars would be allocated annually to support the development of renewable energy in developing countries alone over the course of the next forty years. In addition to this, developed countries will invest ten times this amount in their own renewable energy. This is a rapidly expanding sector, its scale is massive.

Has there already been interest in your wind turbines from other parts of the world?

The Eleon wind turbine has been patented in more than 150 countries all over the world. It was developed in collaboration with leading European scientists in the respective field. People from Denmark, Latvia, Germany, and other countries have visited the Salme wind farm on the island of Saaremaa to check out the prototype turbine, which runs on new technology and is the tallest in the Baltic region. There has been great interest in the project.

You performed a comparison of wind turbines of the German company Enercon and your turbines. The result was that the Estonian-manufactured turbine is more efficient. What was the exact measurement period and what were the results?

We must first emphasise that Enercon is one of the top three wind turbine manufacturers in the world. We wanted a comparison with an absolute market leader. The four most advanced 3 MW E-101 wind turbines by Enercon installed in the Mäli wind farm, which was completed only in February last year, were therefore the best choice. I repeat again – these are the most high-end wind turbines one could find today.

What was the result of the comparison?

As Elering’s comparable data about Mäli are only available from March onwards, we compared the data available for March – December 2015. During this period, one modern wind turbine of the German manufacturer produced an average of 6,803 MWh of energy. Within the same period, the Estonian Eleon wind turbine of equal capacity produced 9,103 MWh of energy. The wind turbine developed in Estonia and patented in 150 countries thus produced 33.8% more energy in the same period than the most advanced wind turbine of one of the world’s biggest manufacturers. And I am not ashamed to say that certain conditions were not in favour of us and the difference could have been even bigger.

Is the Eleon turbine also more expensive than the Enercon turbine? How do you price your turbines?

The Eleon wind turbines are very competitive within their price range. Compared to the same Enercon model, for example, we are able to offer a more efficient turbine for each euro spent.

How many turbines do you expect to produce annually?

We expect our yearly production capacity to be 60 turbines in 2020. These turbines will likely be one of the most expensive products exported from Estonia. But that is the way it should be in our opinion! Estonia will never achieve the living standard of the Nordic countries by exporting wooden spoons.

What stage are your plans currently in?

Construction works in the reference wind farm to be established on the territory of the former Aidu quarry have already begun. The first turbines will be up before the year’s end. Together with the erection of the Aidu reference park, we will be able to gradually bring more of the production to Estonia. By 2020, we plan to reach a production capacity of 60 multi-megawatt wind turbines that would have the text “Made in Estonia” written on the base.

How has the state commented on the wind turbine industry so far? What kind of support do you expect from the state?

Few people believed in the idea of mass producing multi-megawatt wind turbines in Estonia when we first came up with the idea nine years ago. I remember that I tried to convince the managers of Skinest Energia in 2007 to pick an Estonian Eleon wind turbine over a wind turbine provided by WindWind, another newcomer on the market. On that occasion, they chose four 3 MW WindWind turbines for the Virtsu wind farm. It saddens me to say this but it was obviously a bad choice, as the company has gone bankrupt and the wind turbines of that project have yet to be declared suitable for the grid, nor have they received any support.

Attitudes have changed since we started with the installation of the prototype in the wind farm of Salme in 2012. We can now say that we have many supporters who see value in creating a new industry in Estonia. 1.5% of Estonia’s GDP is the contribution of a functional wind turbine industry to Estonia’s economy that we are talking about here. The segment of the country that is considering increasing the country’s exports is already more or less in agreement. Overall, an industry that produces and exports renewable energy devices is in the interests of the Estonian economy, environment, and even national security.

What will your product portfolio look like? Do you intend to manufacture large wind turbines for wind farms or will industrial enterprises be able to commission individual, smaller versions for themselves?

Our philosophy is that if we do something, we must do that to the best of our capability. For example, we use the same technology in the filter systems of our wind turbines that used to be employed in nuclear power plants; we replaced the outdated gearbox technology with a direct drive power transmission as the priority, etc. We intend to keep our focus on large multi-megawatt wind turbines and maintain our position as technology leaders. The larger the turbine, the bigger the advantages of our patented solution. We do not intend to build smaller turbines than the current 3 MW capacity turbine. On the contrary, we aim for bigger turbines in the future.