Just a few years ago, Eesti Energia transferred 700 employees from Elektrilevi to Enefit Connect. Now it plans to move them back the other way.
In 2020, 670 former Elektrilevi employees were transferred to work under Enefit Connect, while around 30 employees were retained by Elektrilevi. Elektrilevi has now announced that from the start of 2024, all activities related to the management and administration of the electricity grid and customer service will be part of its company structure once again. In other words, the services that were transferred to Enefit Connect a few years ago will return to Elektrilevi.
This means that from next year, Elektrilevi will once again employ more than 700 people.
The Estonian government's coalition agreement foresees the separation of Elektrilevi from Eesti Energia. The separation of the company has been under discussion for nearly a decade, since it was suggested by Kaja Kallas (Reform), who at that time was a member of the Riigikogu's Economic Affairs Committee. In 2021, the government made the decision in principle to go through with the separation. However, the separation was not included in Eesti Energia's ownership plans at that point.
Last week, Minister of Finance Mart Võrklaev (Reform) said that the separation is ongoing, and the return of Elektrilevi employees is part of it.
"Perhaps the process that started a couple of years ago, when Elektrilevi essentially became more dependent on Eesti Energia, will be reversed internally and be completed by the beginning of the year," said Võrklaev. When the companies will actually be separated and whether Elektrilevi could become a listed company is still under consideration.
According to Andrus Durejko, head of the Eesti Energia group, Elektrilevi, as the largest network company in Estonia, delivers electricity to almost all households in the country. For that reason, it is necessary that the supporting functions of the most strategically important areas of operation are together in a single company.
"Elektrilevi, as an independent network company with its own management board and supervisory board, will continue to be part of the Eesti Energia Group after the change," Durejko added.
According to Mihkel Härm, chair of Elektrilevi's management board, Eesti Energia has been closely analyzing Elektrilevi's operations and efficiency for the last two and a half years. "During the analysis, we came to the conclusion that the changes made two and a half years ago, which were expected to create synergies and efficiency, have not been fully realized. However, the strategic directions of Elektrilevi and Enefit Connect are now sufficiently different for synergies to emerge, and as the change did not bring the expected savings in costs, it was decided to bring back almost all the supporting functions to Elektrilevi."
According to Härm, the focus for Elektrilevi over the next three years will be to find other cost-effective alternatives to infrastructure investments.
The Eesti Energia group includes Enefit Connect, Enefit Green, Elektrilevi, Enefit Power, Narva Soojusvõrk and Enefit Solutions.
Editor: Michael Cole