PRESS: Vestas to terminate special contract, close Ulyanovsk plant

MOSCOW, Jun 14 (PRIME) -- Denmark’s Vestas will terminate a special investment contract with Russia and close the Ulyanovsk plant that produces rotor blades for wind turbines on July 31, Kommersant business daily reported on Tuesday quoting sources.

The sources told Kommersant that Vestas has become the first foreign company to terminate a special investment contract over the military operation in Ukraine. The company has already launched unofficial negotiations with the Industry and Trade Ministry, the business daily said.

Vestas Manufacturing Rus, a unit of Vestas, signed the 8-year special investment contract in 2018, and invested over 2 billion rubles in the Ulyanovsk plant. The plant has fulfilled the production plan for 2022, but had no contract for 2023.

Vestas said in March that it had suspended participation in the Russian projects, and in April it said it will withdraw from the country. Since the beginning of 2022, the company has sold 13 MW of windmill turbines to the country, and has not planned any new deliveries even though a direct ban on these operations will come in force as part of the E.U. fifth sanction package only on July 10. Since 2018, the Danish company has sold 1.1 gigawatts of wind turbines to Russia, or 1% of its global sales volume, the business daily said.

An Industry and Trade Ministry representative told Kommersant that the special investment contract with Vestas could be terminated by agreement between the parties, and authorities will consider conditions and options after they receive an official request. A decision on repurposing of the Ulyanovsk plant is up to the owner – AeroComposit – to make, the representative told the business daily.

(57.7780 rubles – U.S. $1)

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