Litgrid Approves €62.5M 10-Year Wind Energy Hedge Agreement
Litgrid AB (OMXVSE:LGD1L) approved a 10-year financial agreement with UAB Joreta to hedge wind energy prices. The deal is valued at €62.49 million before value-added tax and covers up to 100,000 megawatt-hours per year from 2027 to 2036 at a fixed contract price of €62.49 per megawatt-hour.
The transaction features a variable price structure paired with a fixed component designed to reduce exposure to price fluctuations in the energy market. To safeguard the deal, the agreement incorporates Guarantees of Origin alongside a €500,000 performance assurance to limit counterparty risk.
Market participants will watch for future details regarding how effectively the hedge performs against spot electricity prices and whether Litgrid expands its hedging strategy to additional assets. Following the news, Litgrid AB shares fell 0.44% to €1.13.
Key points
- Litgrid AB approved a 10-year wind power hedging deal with UAB Joreta worth €62.49 million.
- The contract hedges up to 100,000 MWh annually at €62.49 per MWh from 2027 to 2036.
- Terms include Guarantees of Origin and a €500,000 performance assurance collateral.
- Litgrid AB stock moved down 0.44% to €1.13 following the announcement.
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What is Litgrid AB's new wind power hedge deal worth?
The 10-year financial agreement with UAB Joreta is valued at €62.49 million excluding VAT, locking in pricing for up to 100,000 MWh per year.
When does Litgrid AB's hedging agreement take effect?
The financial hedging contract spans ten years, running from 2027 through 2036 at a benchmark price of €62.49 per megawatt-hour.
What risk protections are included in Litgrid's agreement?
The deal includes Guarantees of Origin and €500,000 in performance assurance to reduce counterparty exposure.