Market announcement

Title

Tallinna Vesi's new prices for water services were approved by the Competition Authority

Message

The  Competition  Authority  approved  the  new  price for water services in the
Tallinn and Saue area at EUR1.84 per m(3) for private customers and EUR3.45 per m(3)
for  business  customers,  plus  VAT.  Tallinna  Vesi  had applied to adjust the
components of the price for water services, which has remained unchanged for the
past  four  years,  to  reflect  the  increased  investment needs to improve the
continuity of the water infrastructure and the new legal obligation to harmonise
the prices for water services charged to private customers and businesses.

"As a provider of a vital service, we have a responsibility to plan our costs to
ensure  a high-quality and sustainable service, today and in the future. We have
carefully considered every cent added to the price for water services because we
want  to keep the service affordable  for all customers. Our customers generally
use  water  sparingly  and  value  water  as  an important natural resource, the
average per capita water consumption is less than three cubic metres per month,"
said Aleksandr Timofejev, CEO of Tallinn Vesi.

The  price for water  services in Tallinn  and Saue will  change by 28 cents per
cubic  metre  plus  VAT  for  private  customers.  The  average per capita water
consumption in this area is less than 3 cubic metres per month, which means that
on  average the cost of  water services will increase  by less than one euro per
person per month. The new prices will apply from 1 July.

Tallinna  Vesi submitted an  application to the  Competition Authority to adjust
the price of its water services in September last year, and as energy costs, for
example,  have  gone  down  over  the  past  eight months, it is now possible to
continue to operate at a slightly lower price than originally applied for.

Given  the changes  in production  and operating  costs and  the high investment
needs  in the water  infrastructure, price adjustments  are also possible in the
future.

Tallinna  Vesi  last  adjusted  its  price  for  water  services across all cost
categories  in 2019, and since then prices  for water services have only changed
to  reflect the cost of  electricity. "In the same  period, however, the overall
price  increase has been almost 40%, which  has also significantly increased our
costs  for the  management of  the large-scale  water infrastructure," explained
Aleksander Timofejev.

Tallinna  Vesi owns Estonia's largest water and wastewater infrastructure, which
requires  continuous investment in  addition to daily  maintenance. "In the last
four   years,   we   have  invested  more  than  EUR80  million  in  renewing  our
infrastructure.  These  and  future  investments  are  necessary  to ensure high
quality  of drinking water, continuity of  water services and the cleanliness of
the Baltic Sea," Timofejev added.

In  the Tallinn  and Saue  areas, the  price for  water services approved by the
Competition  Authority will  change from  the current  EUR1.56 to  EUR1.84 per cubic
metre,  plus VAT. For business  customers, the price for  water services will be
EUR3.45 per cubic metre, plus VAT.

The  price for water services to private  customers in Tallinn and Saue has been
and  will remain  among the  lowest in  Estonia. The  cost of  water services in
Estonia  accounts on average for about 1% of  a household's net income, while in
Tallinn  the  cost  of  water  services  is  less than 0.5% of a household's net
income.

Water  pricing is also affected by the new Public Water Supply and Sewerage Act,
which  took  effect  in  the  summer  of  2023 and  requires  water companies to
harmonise  the  prices  for  water  services  charged  to  private  and business
customers  within  the  next  three  years.  "When  it  comes to providing water
services  in  Estonia,  the  polluter  pays  principle  is becoming increasingly
common.  Although this principle has  been in place for  years, Tallinna Vesi is
now reviewing its tariffs to reflect the amount of polluted wastewater collected
from its customers," the CEO of Tallinna Vesi said.

A  new price, EUR3.87 per cubic metre plus  VAT, will also apply to water services
provided  in  the  Maardu  service  area.  This  price will be the same for both
private  and business customers. In the Maardu  area, Tallinna Vesi is a service
provider,  but not the owner of the assets. Maardu is therefore a separate price
area,  where the investments made to the area from the price for water services,
and the population density have a significant impact on the price. The price for
water  services to customers  in Maardu has  remained unchanged for  more than a
decade,  while  more  than  EUR20  million  has  been  invested  in the region and
investments  will continue  to develop  the wastewater  system and ensure proper
water  quality. With the price change, customers  in Maardu will no longer pay a
monthly subscription fee.

AS  Tallinna Vesi is the largest water utility in Estonia, providing services to
nearly  25,000 private  customers  and  businesses  and 450,000 end consumers in
Tallinn  and its surrounding municipalities. Tallinna Vesi is listed on the main
list  of the  Nasdaq Tallinn  Stock Exchange.  The largest  shareholdings in the
company  are held by the City of  Tallinn (55.06%) and the energy group Utilitas
(20.36%).  24.58% of  the  company's  shares  are  freely floating on the Nasdaq
Tallinn Stock Exchange.

Kristiina Tamberg
AS Tallinna Vesi
Head of Communication and Marketing
+372 52 855 21
kristiina.tamberg@tvesi.ee (mailto:kristiina.tamberg@tvesi.ee)
Ädala 10, Tallinn 10614
www.tallinnavesi.ee (http://www.tallinnavesi.ee)