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Energiasalv - the largest energy storage pump-hydro project in Estonia backed by Sunly and Alexela.

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The project is a once-in-a-generation project for Estonia acting as a critical piece to ensure energy independence as well as enable the transition towards a renewables focused energy system.


Energiasalv - the largest energy storage pump-hydro project in Estonia backed by Sunly and Alexela.

  • The only advanced and fully permitted large-scale long-term energy storage project in Estonia;
  • Capacity to cover 7h of total EE daily consumption (500MW, 6 GWh), 80-year lifetime;
  • Detailed negotiations ongoing for securing revenue guarantee in two ways (long term off take agreement and revenue guarantee from government through cap-and-floor mechanism);
  • Largest project of granite sourcing in the region;
  • Financed until now by leading energy groups Sunly and Alexela, application to be submitted for the EU Innovation Fund third large-scale call for projects and indication of interest and support letters received from EIB and NIB to provide construction financing.

Why now

  1. Every energy company will inevitably become an energy storage company
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  1. Pumped Hydro Energy Storage (PHES) is the best long-term energy storage solution
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  1. Energiasalv is the only permitted large-scale storage project and will be the cornerstone asset in the Estonian energy system
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Energiasalv’s key team comprises of the following individuals:

  • Peep Siitam (CEO & Founder) – Various managerial and advisory positions in Estonia’s largest civil engineering and contracting companies. Active contributor to the Estonian energy strategy via Energiasalv, Estonian Development Fund, AS Eesti Energia and Team Paldiski.
  • Alar Lükk (CFO) – More than 12 years of experience in finance. Considerable expertise in funding and capital management, having helped build the largest stand-alone treasury organisation in the Baltics and contributing to more than EUR 2 bn of market and private funding transactions.
  • Sander Astor (CTO) – Experienced power engineering professional with various managerial roles in Estonia’s largest distribution network and construction companies
  • Salvatore Mercurio (Underground & Civil Works Manager) – Underground design, mining and works expert. Senior roles and project manager roles, more than 30 years of experience in projects across the world.
  • Mario Vee (E&M Manager) – Power network planning, design and construction expert. Senior and managerial roles in Leonhard-Weiss Energy AS and Enefit Connect OÜ.
  • Vesta Kaljuste (Senior Mining Engineer) – Underground design, mining and works.
  • Meeli Taveter (Procurement & Contract Manager) – Project management and coordination.
  • Tõnis Alvet (Design Manager) – Design management and coordination.

In addition to the main team they have a very actively involved supervisory board consisting of the representatives of the two main shareholders:

  • Alexela (Alexela Group is an Estonian holding company. Its three areas of activity are energy, the metal industry, and property development):
    • Marti Hääl (Chairman of Supervisory Board of Alexela) – Energy, strategy and investments.
    • Hans Pajoma (CEO of Alexela) – Banking, investment management and energy.
  • Sunly (renewable energy developer shaping a cleaner tomorrow. They’ve been on a fast-track when it comes to developing and building solar and wind parks in cooperation with communities):
    • Priit Lepasepp (CEO & Co-Founder of Sunly) – Renewable energy and legal.
    • Martin Kruus (Co-Founder and Supervisory Board Member of Sunly) – Power engineering.
    • Kalle Kiigske (Co-Founder & Supervisory Board Member of Sunly) – Renewable energy and investments.
    • Lili Kirikal (CFO of Sunly) – Energy transaction advisory.

renewable energy developer shaping a cleaner tomorrow. We’ve been on a fast-trackwhen it comes to developing and building solar and wind parks in cooperation with communities.


What is the interest for government?

  • Cap and floor mechanism providing revenue certainty. In case Energliasalv is making higher revenue than the cap they share with the to be specified government institution and if the revenue falls below the floor then payment is made to Energiasalv to ensure at least floor level revenue is received. KPMG UK helped develop the model in the UK (which is in application) and now are supporting Energiasalv to develop a similar model with the Estonian government.
  • Currently there is often mismatch between supply and demand and this will amplify considerably in the future as renewable production capacity increases
  • The total amount provided by the EU to enable the Baltics to desynchronize from the Russian system is €1.6 billion of which Estonia receives €300M-€400m. Once the desynchronisaiton takes place then Estonia will need to take on more responsibility in managing grid stability, balancing and frequency for which the existence of additional storage capacity will play a key role.
  • As part of the drilling process for Energiasalv a considerable amount of granite will be excavated, which can be used as the base material for other key infrastructure projects in Estonia such as Rail Baltica and the expansion of the road network to to 2x2 lanes for the main roads. This is an additional aspect increasing the socio-economic value of the project.


  • Revenue risk. Negotiations have been held for close to 1 year educating the government on key elements of the proposed risk sharing mechanism. Given the impact of the war the negotiations have taken time, constant progress is being made. In addition, with the election of the new government that has committed to increasing renewables uptake in Estonia there has been increased interest in supporting the project.
  • Construction risk. The construction process is long and requires drilling below ground, but a similar project went live in Switzerland proving that the solution can be developed in real conditions. Total contructioncost ca 800M€ (400-500M debt, up to 200M equity, and rest covered with revenue from sales of granite). They are in talks to secure the debt financing and working on getting the term sheets from private banks and negotiations are ongoing with the European Investment Bank and Nordic Business Bank;
  • Competition. These project are hard to replicate, but Eesti Energia has noted that they are considering also developing a PHES project, but two times smaller than Energiasalv and Eesti Energia have only started to analyse the opportunity to develop a PHES storage solution and therefore there is a very long process ahead before they can reach the same stage as Energiasalv (3+ years at least).
  • Battery Energy Storage. Battery storage system technology is not sufficiently developed for long term storage, it is less efficient, more costly, the systems degrade quickly over time and require substantial maintenance to remain operational.

Funds spent until today + existing investors

Total: 6M€ equity + 1M€ grant

Investors on board: Sunly & Alexela

The funds have been used for a variety of elements including but not limited to planning and designing of the energy storage unit, environmental assessments, permitting, feasibility studies, land purchase, consultant fee, internal team salaries, technical and legal due diligence. Overall the funds have been used to achieve the ready-to-build status with the energy storage unit.

Round info

Amount: 15M€

Valuation cap: 35M€

Investment type: Equity

Committed so far: 5M€+

The funding will be used to bridge the period until construction and cover the following:

  • Optimisation and the detailed designing of the most critical parts of the energy storage plant;
  • Preparatory work on the construction site as well as cover grid connection contracting & work related expenses;
  • Fees to advisors supporting Energiasalv in securing revenue certainty through a governmental support mechanism and storage as a service agreements.