Caruna
| Company type | Private |
|---|---|
| Industry | Electricity distribution |
| Founded | 1912 |
| Headquarters | Finland |
Area served | Southern, Southwestern, and Western Finland |
Key people | Jyrki Tammivuori (CEO) |
| Products | Electricity distribution |
Number of employees | 300 |
Caruna is responsible for distributing electricity and maintaining a weather-resistant network that serves 700,000 clients throughout Southern, Southwestern, and Western Finland, including areas such as Joensuu, Koillismaa, and Satakunta. In 2021, its customer portfolio included approximately 80 municipalities and 90,000 businesses. Caruna accounts for about 20% of Finland's electricity distribution market. The company's CEO is Jyrki Tammivuori.
Lounais-Suomen Sähkö
The origin of Caruna’s name traces back to the municipality of Karuna, where Lounais-Suomen Sähkö was initially established in 1912 under the name Karunan—Sauvon Sähköosakeyhtiö by local manor proprietors and a merchant aiming to fulfill their electricity requirements. Early initiatives involved utilizing three rapids along the Paimionjoki River. Following the 1960s, more than fifteen smaller local utilities consolidated into Lounais-Suomen Sähkö.
Länsivoima
By 1995, the company extended its operations beyond its original territory, leading to a rebranding as Länsivoima. Growth was driven by acquisitions until it was itself acquired; Imatran Voima first obtained a one-third stake before eventually becoming the majority shareholder.
Fortum Sähkönsiirto
In 2000, Länsivoima ceased to exist as an independent entity when it merged into its parent company, which had evolved into Fortum. It functioned as Fortum’s electricity distribution division for nearly fifteen years.
Caruna
Caruna emerged as a standalone company following Fortum’s divestment of its Finnish electricity distribution operations in 2014. The ownership structure includes both domestic and international pension funds: KKR (40%), Ontario Teachers' Pension Plan (40%), Swedish pension insurer AMF (12.5%), and Elo (7.5%).
Organization
Caruna consists of two network entities: Caruna Espoo Oy, which serves urban regions characterized by high cabling density and customer concentration, and Caruna Oy, which operates primarily in rural zones with low population density and a longer network length per customer (168 meters compared to 36 meters in Espoo). Established in 2014, Caruna’s heritage dates back to 1912 in Karuna. The company employs around 300 personnel directly and contracts approximately 1,000 workers nationwide. Its activities are regulated by the Finnish Energy Authority.
Electricity network
Caruna oversees an electricity network totaling . As of 2019, underground cabling accounted for , resulting in a 56% cabling rate that improves resilience against adverse weather conditions. That year, Caruna achieved a supply reliability rate of 99.99%. The most recent substation located in Suurpelto, Espoo services about 20,000 customers.
Between 2012 and 2017, Caruna invested close to €1.2 billion to enhance the weather resistance of its grid infrastructure; €277 million of this was allocated in 2017 alone. These investments made Caruna Finland’s fourteenth largest investor in that year and third largest relative to revenue. The primary focus has been on underground cabling to mitigate outages caused by storms and snow.
Electricity grid operators are under increasing pressure to raise distribution tariffs to comply with the Electricity Market Act’s mandates for weather-proofing by 2028.
In 2022, more than 4,000 customers provided input on Caruna’s plans for grid development.
Turnover
In 2022, Caruna reported net revenues of EUR 484 million and contributed EUR 6.3 million in corporate taxes. The company invested EUR 127 million toward building a dependable and weather-resistant electricity network.
Back in 2017, Caruna’s turnover stood at EUR 145 million with state tax payments totaling EUR 6 million (4%). That year also saw stakeholder interest payments amounting to EUR 77 million at an average rate of 8.17%, considerably exceeding typical market loan rates between 1.5% and 3%. Under tax regulations introduced by the Sipilä Cabinet, these interest expenses were deductible from taxable income.
Criticism of tax planning
According to the civic group Finnwatch, Finland experienced a tax revenue shortfall of approximately EUR 12 million in 2017 attributable to Caruna's tax strategies. The company took advantage of a Finnish tax provision by engaging a related lender located in a jurisdiction with lower tax rates, enabling it to claim interest deductions and thereby lower its taxable earnings. Finnwatch condemned the Finnish authorities for failing to eliminate this loophole, despite the practical possibility of doing so.