IKEA’s First Investment in Russia’s Solar Projects Covers 160 MW

Ingka Group, the largest IKEA retailer, has announced that its investment arm, Ingka Investments, will fund 160 MW of solar projects, worth $272 million, in south-west Russia, so as to accelerate its investment in renewable energy. The Netherlands-based company has signed an agreement with Solar Systems, LLC, to acquire a 49% stake in its eight solar parks, and hopes to make a grand debut in Russia’s renewable energy market. The agreement is now awaiting the green light from the Russian competition authority (FAS). If approved, it would be the first large-scale foreign investment in the country’s renewables by a non-utility company, as per the firm’s statement. 

While Russia is the largest country in the world, its installed capacity of renewable energy is not proportional to the size of its area. According to the International Renewable Energy Agency, the country had installed no more than 1.43 GW of solar energy and 945 MW of wind power by the end of 2020. The proposed investment by Ingka, therefore, is a welcome development since the energy capacity of the 8 parks would be enough to supply electricity to all IKEA Stores in Russia – 17 to be exact- as well as 14 IKEA-owned MEGA shopping centres found across the country.

“We are looking forward to working with Solar Systems and enabling renewable electricity consumption for IKEA Retail, Ingka Centres operations, as well as the IKEA value chain to reduce our climate footprint in Russia,” said Krister Mattsson, Managing Director, Ingka Investments. 

In a press release, Solar Systems said that the company “is pleased to have a strategic partnership with an international company that shares the values of sustainable development and sets ambitious goals for achieving carbon neutrality.”

In recent time, IKEA, the world’s biggest furniture retailer, has been working towards achieving its goal of becoming climate positive by 2030 through reducing greenhouse gas emissions by more than those of the entire IKEA value chain, right from raw material production, all the way up until customers’ disposal of their furniture. Since 2009, Ingka Group has made investments worth EUR 2.5 billion in renewable energy. The company recently revealed that its global renewable energy generation exceeded its consumption in own operations due to investments in solar and wind technology. The Swedish furniture retailer is currently looking for investment possibilities in China and Russia.