Eesti Energia, state-owned power utility in Estonia, has acquired renewable energy company Nelja Energia for €289mn, Eesti Energia said on May 29.

Eesti Energia is also taking over Nelja Energia’s debt of €204mn, which pushes the total value of the deal to €493mn. That makes the transaction the third largest Estonian takeover deal ever, after Swedbank’s purchase of Hansa Bank in 2005, worth €1.7bn, and Tallink’s takeover of Silja Line for €550mn in 2006.

The seller is Norwegian company Vardar, which said it is going to focus on its home market and is therefore offloading assets abroad.

The acquisition of Nelja Energia will help the state-owned company carry out its strategy of increasing the share of electricity from renewable and alternative sources to 40% in Eesti Energia’s portfolio by 2022, Eesti Energia said in a statement.

“We see ourselves in the future acting as a producer of renewable energy in Estonia, Finland, Latvia, Lithuania, and also in Poland – in all these countries Eesti Energia also operates as a power seller,” said Aavo Karmas of Enefit Green, an Eesti Energia subsidiary that is the buying entity.

Following the deal – which still has to be approved by the Lithuanian, Latvian, and Estonian competition authorities – Eesti Energia will produce 1 terawatt hour (TWh) of energy annually, compared to the current figure of just under 0.4 TWh.

Nelja Energia owns 17 wind farms in Estonia and Lithuania, totalling 287 MW in capacity. The company also has a minority share in two biogas power and heat cogeneration plants in Estonia and owns a pellet factory and a co-generation plant in Latvia.

The Estonian renewable energy output grew 14% in 2017 to total 1,612 gigawatt hours (GWh). The Baltic state’s energy strategy seeks to boost the share of renewable energy in total consumption as well as pushing energy efficiency targets.