Priit Lepasepp On Selling A Renewable Energy Company For $319 Million And Raising Over $1.44 Billion To Offer Renewable Energy to Customers

Priit Lepasepp’s story is one of navigating the currents of history and reshaping the future of energy. Born in 1986 in Soviet-occupied Estonia, Priit experienced a world that was vastly different from the one he would come to build.

In this interview, Priit talks about overcoming hurdles and successfully scaling Sunly, which fundamentally transformed the energy landscape of Eastern Europe. Sunly has attracted funding from top-tier investors like Rivage Investment, Kommunal Landspensjonskasse (KLP), Copenhagen Infrastructure Partners, and mBank.

In this episode, you will learn:

• Priit Lepasepp’s early exposure to Soviet and Western systems shaped his entrepreneurial vision and adaptability in a global market.
• His legal background in environmental law provided valuable insights for navigating the highly regulated renewable energy industry.
• Priit transitioned from advisory roles to working in the renewable field and then founded a renewable energy company, seeking hands-on experience in driving real-world impact.
• Nelja Energia pioneered renewable energy in a skeptical market, eventually leading to a highly successful acquisition.
• Priit’s venture, Tuleva, disrupted Estonia’s pension fund market by offering low-cost, long-term investment solutions, showcasing his ability to innovate in finance.
• With Sunly, Priit shifted focus to end-user needs in the renewable energy sector, building an impressive 18-gigawatt pipeline of projects.
• Despite geopolitical challenges, Priit raised over $1.3 billion in capital, demonstrating the growing investor confidence in Eastern Europe’s renewable energy landscape.

 

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About Priit Lepasepp:

Priit Lepasepp, based in Tallinn, Harju County, EE, is currently a CEO and Founder at Sunly. He brings experience from previous roles at Energiaühistu, Tuleva, Nelja Energia, and Law Firm Sorainen.

Priit Lepasepp holds a 2005 – 2008 BA in Law at the University of Tartu. With a robust skill set that includes Legal Document Preparation, Litigation, General Counsel, Planning Law, Contract Law, and more.

Connect with Priit Lepasepp:

• LinkedIn
• MarketScreener
• Crunchbase
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: Already, hello, everyone, and welcome to The Deal Maker Show. So today we have a really amazing guest. you know I guess that has done it multiple times. you know I mean, it’s quite dizzy when you hear the amount of times that he’s done it, and very successfully so. And we’re going to be learning about pioneering you know in a new segment, in this case, renewables, ah how to go about you know like when you’re dealing with with with hurdles, with bigger banks, bigger players,

Alejandro Cremades: And then also ah how to go about overcoming you know hurdles that are presented by the market, by the circumstances. And again, you know building, scaling, financing, and even exiting. So brace yourself for a very inspiring conversation. And without further ado, let’s welcome our guest today, Preet Lepaseb. Welcome to the show.

Priit Lepasepp: Thank you for having me.

Alejandro Cremades: So originally born in Estonia. How was life growing up? Preet, give us a walk through memory lane.

Priit Lepasepp: My year of birth was 1986. So it was a Soviet Union still. So I’ve been brought up in a system where I was five years old when I started to see capitalism first. So I think for me, and it has been a good thing.

Priit Lepasepp: ah I was still not so old to earn much about in the 90s because in the 90s it was rather this kind of cowboy capitalism in in Eastern Europe that everything was still publicly owned and now and the people had the possibility to privatize certain things. So that I did enjoy, but what I enjoyed definitely was but everything else that a geek can have. so Obviously I had relatives that were in West and then I had the possibility to meet with them and and these kind of things and it opened my eyes on on many topics. One of the topics was that

Priit Lepasepp: ah how different things, what’s what was said in Soviet Union, how they were were really in the West, when the West was in your eyes. So TVs, everything that you can imagine. So the conflict was was very big. So this, I think, was the first big change in my life. Like, who am I today?

Alejandro Cremades: So tell us, how did you get into law? Out of all things, because I mean, obviously, that’s not really the path that you ended up taking as a founder, but out of all things, law. Why?

Priit Lepasepp: I think one of the speak big things why was was my brother. My brother was starting studying law before me and we grew up together. Our parents were engineers and I saw how complicated engineering could be and how complicated it is to earn money out of that as well. And and I thought that I’m rather this kind of social creature that I don’t want to so much deal with stuff, but I would like to deal with people. And at that time, I think it was ah also a right decision. i Basically, a lot of my relatives were engineers. And and then I thought that let’s let’s do a shift. And then I started started to study law. And quite quickly after that, I started to concentrate law in environmental aspects. And yeah, so this was the main reason.

Alejandro Cremades: So obviously that’s saying what ended up getting you into the renewable sector. I guess, how would you say that the legal background has served you? Even though you’re not a lawyer anymore, how do you think it has served has served you? Like what kind of perspective it has given you?

Priit Lepasepp: It gives you many aspects. I think when you study law first year, then you study social ah aspects, ah psychological aspects also, because it’s an order of of rules and why previously when you were not around, why those rules were invented or put on paper and how you can change them as well. And if you look at the field of energy, for example, or the field of financing, both are very regulated markets.

Priit Lepasepp: And to do their something, you have to have a view on those aspects as well. Like you have to be understanding not only the technical aspects, but the social aspects as well. And ah so why it is this so complicated to do a bank, for example, in Europe, you need to understand it or why to do how to do asset management company, then that you need to also understand. And when we talk about electricity, then you also need to know exactly how on paper it works.

Priit Lepasepp: because money and value and energy is something that is very important. Energy, I think when society or humankind invented fire, this was very important for us. And and and this has been constantly around. So there is a lot backlogs of standards, backlogs of laws, regulations that the need to understand, but not only understand, but also change So in in those fields where I’ve been doing business, lobbying has been one of the main things to even do that business in certain countries.

Alejandro Cremades: So how do you get into renewables and more importantly, the shift from being on the drafting to being on the execution you know side of things?

Priit Lepasepp: I think it’s ah something that I’ve quite ah early stage understood that I don’t want to be in advisory business ah because I then only saw one part and I only ah showed to my customers who were energy companies, for example, what are the risks there and how to act so different alternatives. But I never saw how they but my knowledge that I gave them, how it was then really done. So what kinds of risks were taken and how the project finally looked like. So this was the main thing that I really understood that

Priit Lepasepp: Being an advisor, it’s a very good thing to earn steady cash flows until you are old and you don’t anymore physically or mentally capable to serve. And I think this was the main thing. i Quite early stage, I wanted to go into a business and see myself ah how renewable energy will work internally. Because only then, when you understand that, you can do business in that sector.

Alejandro Cremades: So then let’s talk about a getting going with your first company with Energia, which ended up getting a really nice outcome. So how did the whole idea of Energia come together?

Priit Lepasepp: I think at that time it was, let’s call it first, Kyoto Brotogols that were signed with talking about CO2 quotas. The story started to be, let’s say, in the 90s and then countries ah were starting to think about renewables and thinking that energy sector impact to climate and and and environment.

Priit Lepasepp: and And then there was different ideas how to do it. And I think at that time, the main business was this old conventional ah renewables, which basically meant that you will develop a developer project, build it, and there is a free ride to the market, basically, that there is a subsidy and there is electricity price. and And when you will put all that together, then you can earn money out of that. So I think that could

Priit Lepasepp: That could explain also why we’re at the end exited as well, that those subsidy periods will start to start to end. The pioneering part was also relevant because the technology was still in early steps.

Priit Lepasepp: but I think Leila and Erika started when when when turbine sizes were still near one megawatt. Then our biggest turbine was three megawatt capacity turbine. So today we are talking about capacities of 6.5 on land or seven. And um and it’s completely different business. ah but One thing is technology as well. the Technology is involved and And if you if you keep on dragging the old assets, then you will stay to deal with them and not deal with the growth. So I think that that was that that was the that was that part with Nela and Erega. So why we did it, why why it was cool to do it as well. So I remember at the time when

Priit Lepasepp: then state-owned incumbent energy producers didn’t want to do renewables. They say that it’s a key display that we want to have big turbines and steam engines and everything related to the chimneys was cool and these turbines, they were just toys. But that toy business started to be a very big market for everybody.

Priit Lepasepp: so And I remember also that banks, they didn’t want to lend you money because they didn’t understand this key display. So it was very complicated to get the the project financed as well. So the pioneering part was was quite interesting, but I think it was good to that we closed that topic in 2018.

Alejandro Cremades: So for the company here, for Energia, it ended up getting acquired, right which is a amazing. So walk us through how that acquisition process came about. you know Make us insiders for a minute here.

Priit Lepasepp: I think two things. ah Investors, so being in new fields, they want to exit constantly. like ever you it’s ah It’s like, with the let’s say, with marriage. that you When I’m a lawyer, so I have this kind of aspect that if you enter into a deal, then you should think about how to get out of that as well. Not that the vow that you give is is less important, but I think you should concentrate on that as well. That’s how you will get out. so I think for Nela and Erica, it was a relevant time to get out because the investors wanted to get out. So it would have been hard to grow the business further, um we although we had a quite nice pipeline to to build. And in 2018, it was the time where incumbent energy producers wanted to have also renewable and energy pipelines.

Priit Lepasepp: and um And they wanted to do IPOs or raise extra capital on basis of renewables. So there there was a huge list of companies that wanted to acquire ah the business. And we were basically acquired by stone and state owned the energy company. and And after that we

Priit Lepasepp: basically exited for one year from the old market so we had no compete but I think in the deal what was relevant was was this interesting part that how to sell a company to a company that is smaller than you are and how to swallow their pride and that that i that and this kind of um feeling that you build it.

Priit Lepasepp: ah And I think that was and not easy. But looking back, I think it helped us a lot. We had the money, we had new ideas, and we can we were able to start once more.

Priit Lepasepp: so And also,

Alejandro Cremades: what were the terms of the what were the terms of the deal

Priit Lepasepp: I think it to simplify it, the the the shareholders got all together some 287 million euros in in cash in hand because it was ah the company had a almost almost of 600 million, ah but there was a lot of debt in that as well. So in that sense, it was a very, very good deal.

Priit Lepasepp: just before there were very good wind years as well.

Alejandro Cremades: What were the terms of the what were the terms of the deal?

Priit Lepasepp: um The company size at that time was 287 megawatts as well, like per million per megawatt. um and And there were like a pipeline of projects, almost one gigawatt that the the new buyer was able to buy. And what else? I think it’s, and and with those numbers, we were the biggest. And when we look suddenly today, after six years,

Priit Lepasepp: We have ah more capacity under operation and more in development that Nelya and Erga did. So it’s it shows that this was this pioneering business. Like you had a lot of things there already built. So, and they were operational and and yeah, but but yeah.

Alejandro Cremades: So one of the other companies that that you started to and that you are still part of is Tulava. And basically the whole idea was to bring the BlackRock type of model.

Priit Lepasepp: la

Alejandro Cremades: And you guys have been quite successful there with about a billion in assets under their management. So what exactly do you guys do at Tulava?

Priit Lepasepp: Tulava is a very simple and simple fund manager for second and third pillar funds.

Priit Lepasepp: And the second pillar is mandatory in Estonia, which basically means that ah that you need to put aside certain amount of money for your pension. So we don’t have ah like company programs for you, but we have state programs. You can choose asset manager and a fund where you would like to invest. And when Tulava started in Estonia, there were only banks that owned asset managers.

Priit Lepasepp: and who offered then this these kind of products and the the products ah management fees were very high so they offered usually index funds to Estonia and the cost was some 1.5 percent and it was 2016 just to envision everybody because they are very cheap today but they weren’t at that time and and also additional like costs to ah for the engineers to be part of the those funds were also there so all together in some places the funds total cost to end customers were over 2%

Priit Lepasepp: So to have a very long instrument carrying a 2% cost on you, it’s ah it’s killing you, and suffocating you and over 30 years it can swallow a lot of money that will not ever earn anything for you.

Priit Lepasepp: And we just did one thing. We gathered around some 300 people, ah sorry, 3000 people to raise cap very small capital because we started this business as a cooperative. And basically those people gave us money to do finance finance the financial requirements or legal requirements to do a fund manager in Estonia and then we went to talk with BlackRock and asked them to have to have different funds and we basically did a product that from the day one the cost was 0.5% all together with regulatory costs and ah we are today somewhere near 0.35 so

Priit Lepasepp: So this was the topic and the total home is almost one billion today. So it’s ah it’s growing and growing. And we are showing to the market as well that that long term savings are long term investments towards towards pensions that the index funds are are doing doing in longer run better due to the costs um mainly.

Priit Lepasepp: ah better than other actively managed funds in average. So I think it’s um it’s ah it’s a very good story and it’s this kind of positive continuing story and has been so far. And it’s very interesting also how to get investors on board and how to educate them in a market which is not very very well-educated on on saving so saving money in the past.

Alejandro Cremades: Now,

Priit Lepasepp: We have 75,000 customers today.

Alejandro Cremades: like everything, you know an entrepreneur is an entrepreneur, no? And in parallel, you know you decided to get going with suddenly, which is say arguably your biggest success to date in terms of size. you know I mean, it’s a remarkable what you guys are doing. So so suddenly, tell us about suddenly. Why suddenly and what’s the business model there in suddenly?

Priit Lepasepp: So suddenly, it started in 2019 from one thing. In 2019, there was new goals for 2030 by the European Union and also the member states to be more renewable.

Priit Lepasepp: And what we had there, the situation can be rather described as when a city has 100,000 more residents in them, ah where to put them to live and you don’t have the room. So um and then you still have the old regulation how to zone and and do yourself a building permit. So we had the situation where the numbers difference were very huge, meaning that there was almost no projects that you could build.

Priit Lepasepp: And there was nobody was developing anything, but you needed to have in in four or five years you needed to have in gigawatts new projects. So when we started, we started basically internally developing new projects. We were one of the early ones who basically understood that renewables is like industrial revolution that the new production units will be a new place and you need to sown them. So two things that we craft first were people, experts in that field. And the second was what was land. So we went to big landowners saying that, look look, let’s start to go develop and go own the assets on their sites and and and develop it. So we grow our pipeline

Priit Lepasepp: So far that we do, they have some 18 gigawatts on land developments in in ah wind, battery storage and and solar. And this was all due to the right decisions we made in 2019. But we have been constantly wanting to be a renewable energy company back again, meaning that owning assets and selling the electricity to to end consumers and we have been constantly investing into startups or hardware startups in our fields because we thought that in suddenly the the difference with the old renewable energy and new is that we have to concentrate on on

Priit Lepasepp: on end customers so not about the megawatts that you can build but concentrating on those megawatt hours because if you put into a small system too much ah renewable then the prices will be constantly zero and ah this zero will not help the end customer and it will not help suddenly as well. ah Why we need to serve depth as well. And the customer ah usually when the zero prices are there, they are not consuming as well. So you need to think about how to satisfy the end customers need. So this is different in suddenly compared to Nela and Erica, for example.

Alejandro Cremades: And obviously, it’s different too when it comes to financing. I mean, you guys have raised quite a bit. How much have you guys raised in equity and debt as well?

Priit Lepasepp: On the other company level, we have raised almost 300 million, so little some millions less, but but additionally, we just ended and closed a deal where we did a bond instrument with Copenhagen Infrastructure Partners and RIVARS, both fund managers, ah who um who gave us money to build out additional projects.

Priit Lepasepp: So it it was additional 300. And then we have, basically against that, almost the same amount of senior financing in project level.

Priit Lepasepp: So all together, it means that over over ah over a billion euros. And 60, or five five years.

Alejandro Cremades: Over a billion. i mean And and how how is it to the ah the journey of raising all that money? I mean, we’re talking about $1.3 billion between or more between both equity and debt, and also ah going through experiences like the Ukraine war that I’m sure that they complicated things quite a bit. So how has been the journey tool for going through the motions of raising all the money?

Priit Lepasepp: One thing is what is good about Eastern Europe now compared to 10 years or 20 years ago ah is that this Russian flag has been different. ah When Croatia conflict was there in 2007 or eight, I don’t recall anymore the exact year, but then the investor faded away also from the market. like west Western investors, then it was Ukrainian conflict start or Crimea conflict start in 2014, then the same thing happened once more. But now when when when ah last conflict started the overall conventional war um against Ukraine by Russia, then something completely different happened that the investors didn’t fade away.

Priit Lepasepp: So we did our last e equity raise and we started it exactly on the same day basically when when the conflict started and the situation wasn’t that grim as it was before. So it’s it shows as well that the Eastern European part of Europe are are seen a little bit differently than in the past, which automatically also means that if if you look at how much eastern europeans or Eastern European countries have to build up, for example, their energy energy systems,

Priit Lepasepp: going away from Russian natural gas towards a new facilities, then investors understand as well that it’s Europe. It offers, at the moment, better returns than in Western Europe. Yes, the risks are a little higher, but we are still in OECD, we are still in NATO, we are still in the European Union.

Priit Lepasepp: so um So yeah, so I think that ah it was a little, little a lottery ticket at that this time it really didn’t happen. So there we didn’t have anything like that we could do, ah but just to believe that that they will stay on the market. and and yeah so it but This time it went well, but we had also something to offer. so We had offered to build new assets and help the communities to get over ah from very expensive Russian natural gas.

Alejandro Cremades: So let’s talk about vision here, because obviously when you’re getting ah this level of investment, you know also getting the team together, vision is a big one. So if you were to go to sleep tonight, breathe in, you wake up in a world where the vision of suddenly is fully realized. What does that world look like?

Priit Lepasepp: The world will be almost fully ah renewable in those markets where we are. So it’s the Baltics and Poland today. And why? It’s possible. We are quite near to Scandinavia. and And also why I believe in that world is not about mainly about the climate, but it’s exactly the fact that We have only old power plants. It’s based on lignite or it’s natural gas. Natural gas is coming from different regions, but mainly it was coming from Russia in this region. And so these kinds of formulas at the moment help us to build out renewables. And the only reason is that you you can buy

Priit Lepasepp: PV plants, you can buy turbines ah and obviously you can buy natural gas power plants as well, but the the fuel is coming from the wrong place. So the opportunity is very exceptionally big and this is why I really believe that this time it will really happen. that those wind farms and and PV parks and pump hydro storage facilities and battery energy storage facilities will happen. And the consumers will also get smart because a lot of their money is wasted in this old market.

Priit Lepasepp: meaning that that due to the fluctuating prices, people don’t understand how the market really works, but then they have understood that they need to understand but because otherwise they will lose all their savings. So this cocktail together will mean that by 2030 Estonia or Baltics will be let’s call it statistically on average basis annually, 100% renewable. And Poland will still have some years to go, but it will be a very different system than it is today. So that is something that’s that I dream about to market and that though that keeps me waking up every morning. And this is a huge opportunity for investors

Priit Lepasepp: to be here because if the system is then built then for the next 25 to 30 years it will be still again this kind of quiet market but today it’s a very big opportunity at least for the next 10 years.

Alejandro Cremades: So we’re talking about the future here, but I want to talk about the past with a lens of reflection. Let’s say I was to bring you back in time, I put you into a time machine, and I bring you back in time. you know Let’s say maybe to that moment in two thousand around 2016 or so, where you were thinking about like venturing out and and heading into the entrepreneurial path. Let’s say you had the opportunity of being right there with a younger print, and you’re able to give that younger print one piece of advice before launching a business. What would that be and why, given what you know now?

Priit Lepasepp: I think I would learn a little quicker and to understand to take more risks because in some of the places you need to take the risk. It’s the same example, for example, what is said also that if you start to grind a new business for yourself, then when you really believe that it already works, then stop doing everything else and concentrate on this one topic.

Priit Lepasepp: ah you need to do it because otherwise let’s say there there is definitely somebody else who will take the idea from you. So in suddenly we have seen also many lost opportunities because just but we have seen good things as well happening. So this is where the value is coming from as well. So but it’s ah it’s quickly learning, adopting and also taking risks and also taking ah personal risks. So it meant in some some of the cases that all my money was invested and um I paid myself only a very low salary to pay salary to somebody else. so it’s And today it’s vice versa that i I’m paid quite okay.

Priit Lepasepp: and but it it hasn’t been constantly like this so my family has been involved in this risk taking and I’m very happy that I did many of those things that I did today looking back but giving some advice I think ah to do those things quicker, not to hesitate, try it out, see how it goes, and also adapt to that, that maybe it didn’t work out. In some of the business ventures in suddenly as well, we have closed down the business as well. You have to very quickly do it, but you can, it’s easier to do when you have some savings. So, um yeah.

Alejandro Cremades: No kidding. So Prit, for the people that that are listening, I would love to reach out and say, hi, what is the best way for them to do so?

Priit Lepasepp: To say what? Sorry.

Alejandro Cremades: To say hello. like People that are listening, that are super inspired, that are like, hey, how can I you know reach out to Prit, or how can I learn more about Shanli? What’s the way for them to do so?

Priit Lepasepp: I think one thing is LinkedIn. You can find me there. The other place is our website. So you can go there. You can contact me. And I’m quite open-minded. If you have a good idea, then I will be definitely on it.

Priit Lepasepp: And I will be quite frank if your idea is stupid as well. So this is one thing to understand that ah there might be good ideas that that has been working in the past as well. But yeah its um for me, it is very relevant that to see that To see the ambition, ah it’s it’s also with investors. ah There has to be ambition. So I’m i’m delivering today every year or I need capital every year almost 500 million euros next two years. So um there has to be, I have to commit and and the investor has to commit as well. So this is relevant. But other thing, what is relevant is that I i think

Priit Lepasepp: What is good about Sunlist is that I have two co-founders here as well. And we have been a very good sparring partners. And they have we we we do the sanity check to each other as well. So this sanity check I can give also to everybody else as well that, look, this idea is not, and at least in that form, it’s not working out or it would work out very well, but you have to start now. So yeah, that I can give.

Priit Lepasepp: as a promise ah to the listeners that that I can do as well.

Alejandro Cremades: Amazing. well hey well pritt Thank you so much for being on the Dealmaker show today. It has been an absolute honor to have you with us.

Priit Lepasepp: Thank you for having me.

*****

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