Novawind ends contract with Dutch partner due to sanctions

MOSCOW. March 6 (Interfax) - Novawind, the division in Rosatom responsible for developing renewable energy, has terminated its lease contracts with Dutch Red Wind due to sanctions, according to the Russian company's 2022 RAS financial statements.

Red Wind is a joint venture between a Russian company and Dutch Lagerwey.

The company had entered into lease and sub-lease contracts for the production and assembly of components for wind turbines, the document says.

The contracts with Red Wind B.V. were terminated on July 7 "due to the imposition of economic sanctions," the document says.

As a result, Novawind took over the functions of production and installation of the wind turbines "taking the imposed sanctions restrictions into account."

This resulted in "significant operating losses." Novawind's net losses in 2022 were almost 0.63 billion rubles compared with a profit of 0.3 billion rubles in 2021, the reporting said

Last year, revenue decreased 4.8% to 3.4 billion rubles, and cost of sales increased 37.4% to almost 2.8 billion rubles. The main changes occurred in terms of wind energy equipment, the document says. As a result, gross profit was 602.6 million rubles for 2022, after reaching almost 1.54 billion rubles in 2021.

The company's other income and expenses increased significantly. Other income reached 607 million rubles, a 13.5-fold increase, mainly due to the return of duties. Expenses increased 3.7 times to 848 million rubles due to leasing expenses.

A joint venture with the Dutch wind turbine manufacturer Lagerwey was established in 2017. The purpose of the enterprise was the localization of production in Russia. It was assumed that the joint venture would be responsible for "contracting components for subsequent delivery to the production sites of Novawind in Volgodonsk," Novawind said. As part of the partnership, Lagerwey was supposed to supply components for the first 60 wind turbines and ensure "the transfer of technologies for the production of wind turbines with a capacity of 2.5 MW and 4.5 MW to the Russian partner."

"As part of the first program to support renewable energy, Rosatom successfully carried out a technology transfer and localized critical important components. Under conditions of sanctions pressure, we managed to maintain the pace of project implementation at a fairly high level," Novawind CEO Grigori Nazarov said at the end of last year.