The acquisition, endorsed by Mikkeli’s City Council and board, marks the fourth investment for abrdn’s third Core Infrastructure Fund, ASCI III, which is actively fundraising and targeting mid-market infrastructure investments in Europe.

Etelä-Savon Energia was formed in 1900 and at the end of 2022 it had approximately 2,500 district heating and 25,000 electricity distribution connections. The company produces, sells and distributes, heat and electricity in an efficient and reliable manner to its customers in the Mikkeli region, whilst playing a leading role in the reduction of emissions in the wider region.

The company also has an electricity distribution network with a total length of around 1,000km and a district heating network with a total length of approximately 210km with the heat sourced locally and from environmentally friendly fuel sources.

The company and its management team will benefit from having an aligned shareholder group bringing together an experienced partner with deep infrastructure knowledge and continued local support from the City of Mikkeli. The shareholder group shares a joint objective of (i) supporting the energy transition in the region through the production of renewable energy and (ii) ensuring sustainable growth of the Company through the supply of safe, local and cost-effective heat and electricity solutions.

Dominic Helmsley, head of abrdn Infrastructure, said: “We are thrilled to announce the fourth transaction from our third infrastructure fund, ASCI III, and our fifth investment in Finland.

“This transaction follows our strategy to acquire and manage premium infrastructure assets in Europe, and to work on behalf of our investors with local stakeholders to deliver safe and reliable essential services to local communities.

“The City of Mikkeli and abrdn have worked together to agree a transaction that benefits all parties and we look forward to continuing to work in partnership with the city for the long term.”

Soti Calochristos, investment director, abrdn Infrastructure, said: “This investment demonstrates our continued support of the Finnish infrastructure market, which represents our fourth investment in the district heating market, as an attractive jurisdiction.

“We are delighted that the City of Mikkeli have selected us as their preferred partner in the continued delivery of heat and electricity services to Etelä-Savon Energia’s clients and to continue the development of the company.

“We look forward to working closely with the City and the Company to grow and support the business during its energy transition, whilst continuing to provide sustainable and reliable energy to the local community.”

Janne Kinnunen, mayor of the City of Mikkeli, said: “During the process, abrdn turned out to be clearly the best partner candidate from the point of view of the City of Mikkeli. The company has experience with municipal energy companies and is committed to the goals set by the city council.”