Public Joint Stock Severstal : Severstal invests further into Russia’s renewable energy sector

PAO Severstal, one of the world's leading vertically integrated steel and steel-related mining companies, has bought an additional 24.5% stake of joint venture WRS Towers from JSC RUSNANO. The transaction was closed in September 2021, and Severstal's share in the joint venture has increased to 49% as a result. Spanish company Windar Renovables S. L., another partner in the JV, retains its 51% share.

WRS Towers, a joint venture between Severstal, Windar Renovables S. L. and RUSNANO, was established in 2018 to support the growth of Russia's renewable energy sector. Since its founding, the JV has produced more than 340 steel towers for wind turbines. WRS Towers reached its intended production capacity of 145 towers per year in 2020. To date, more than 1 billion rubles have been invested in the project.

On creation of the JV, the partners' shares were distributed as follows: Windar Renovables - 51%, RUSNANO and Severstal - 24.5% each. RUSNANO took the decision to sell its stake in the project, which produces towers for wind power plants (wind turbines) in Taganrog, once the joint venture had met its economic targets.

Today, WRS Towers is the leading manufacturer of wind turbine towers in Russia. "Green" power plants built using the JV's equipment have already been installed in the Kamensky, Azov and Verkhnedonsky districts of the Rostov region, as well as in the Murmansk region. WRS Towers also plans to supply products for export orders.

The steel billets for the wind power towers are manufactured at the service metal center in Kolpino (SMC-Kolpino) which is part of Severstal's Russian Steel division. Severstal guarantees secure supply of raw materials for the project and high quality throughout the entire technological chain.

Alexander Shevelev, CEO of Severstal, commented:

"Increasing our share in the joint venture was a logical step to strengthen Severstal's presence in Russia's fast-developing renewable energy market. Over the three years since it was launched, the joint venture has demonstrated good results, partnering with world leaders in the wind energy market - Siemens Gamesa and Vestas. The WRS Towers management team are now in active negotiations with potential international customers and we plan to start shipping the first export orders in 2022. We see the greatest potential in the CIS countries, where wind power is growing, and also in Northern Europe. Supporting the development of solutions to address environmental issues, including climate change, is a priority of Severstal, and increasing our share of WRS Towers is fully in line with Severstal's ESG strategy."

Alisher Kalanov, Head of Investment Division at RUSNANO, added:

"The cycle of project support from RUSNANO, as a development institution that forms innovative ecosystems along the entire value chain, including production and education, has been successfully completed and as per its mandate RUSNANO has exited from the project. RUSNANO does not plan to stop there and, jointly with Windar, Vestas, and Severstal, is discussing the ability to expand the range of products manufactured by WRS Towers LLC - both those customized for the Russian government's future renewable energy support programme, and for the potential manufacture of offshore wind turbine towers - including those used to construct wind farms to provide the 'green' electricity to produce 'green' hydrogen".

Justo Acedo, General Manager at Windar Renovables, said:

"Through the different actions that RUSNANO has taken, this company has been a key player in this project and also enabled Windar Renovables to reinforce its position in the Russian market. As a result, Windar Renovables and RUSNANO have developed a strong relationship which we value very highly."