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EVN Group: Austria's Quiet Energy Giant
A Regional Provincial Utility That Built a Southeast European Empire
In the quiet town of Maria Enzersdorf, nestled in the green hills of Lower Austria just south of Vienna, sits the headquarters of a company most global investors have never heard of. There are no flashy billboards, no celebrity endorsements, no Silicon Valley-style campuses. EVN Group is the second-largest utility in Austria—but measured by ambition, geographic reach, and sheer institutional resilience, it punches far above its weight.
EVN Group is an Austrian-based producer and transporter of electricity, one of the largest in Europe having over three million customers in 14 countries. The company also operates in water treatment, natural gas supply and waste management business areas.
Yet here is the paradox: Less than 14% of EVN Group shares are free float on the Vienna Stock Exchange, with the state of Lower Austria holding 51 percent. This is not a growth stock in the traditional sense. It is something far more unusual—a state-controlled, partially privatized utility that has survived world wars, the Cold War, EU liberalization, the 2022 energy crisis, and regulatory disputes across multiple emerging markets.
How did a regional Austrian provincial utility become a multi-country energy empire spanning Southeast Europe while maintaining one of the most diversified business models in European utilities? That is the question we set out to answer.
The episode themes that emerge from EVN's century-long journey include: the tension between state ownership and stock market discipline, the EU liberalization gamble that forced domestic consolidation, the high-risk adventures in emerging markets that nearly became cautionary tales, the pivot to renewable energy, and the stress test of the 2022 energy crisis that proved the company's diversified model was more than just diversification for its own sake—it was a survival mechanism.
I. Origins: Post-War Austrian Electrification (1907–1985)
The Birth of an Electricity Network in the Habsburg Twilight
The company that would become EVN traces its origins to 1907, when the state of Lower Austria founded its own Landes-Elektrizitätswerk (provincial electricity works). This entity built the Wienerbruck hydropower plant for the electrification of the Mariazellerbahn railway and to supply power to the city of St. Pölten. At its inauguration in 1911, Wienerbruck was the largest storage power plant in Austria-Hungary.
Picture the Austrian Empire in its final years: the Habsburg monarchy crumbling, but an industrial revolution demanding power. Railways needed electrification. Cities demanded light. And in Lower Austria, a provincial government decided that electricity was too important to leave to private speculators.
After the dissolution of the Habsburg monarchy and the separation of the archduchy into the provinces of Lower Austria and Vienna, the NEWAG (Niederösterreichische Elektrizitätswirtschafts-Aktiengesellschaft) was founded in 1922. The owners were the aforementioned provinces and other public and private shareholders. NEWAG's mandate was to build power plants, construct a province-wide transmission network, and electrify previously unserved areas of Lower Austria.
With three share emissions in 1922 and 1923, the company opened itself to small shareholders. At this time, it had no monopoly on electricity supply in Lower Austria, so its primary task was to connect isolated smaller power grids with a provincial transmission network and electrify still-unserved regions.
The Nationalization Watershed
The most consequential moment in EVN's early history came in 1947, when Austria's post-war government fundamentally reshaped the country's energy landscape.
With the nationalization of Austria's electricity industry in 1947 (Second Nationalization Law), the state of Lower Austria became the sole owner of NEWAG. Most of the remaining independent electricity suppliers were taken over by NEWAG. A decades-long legal dispute over the Vienna suburbs supplied by Wiener Stadtwerke was only settled at the end of the 1990s, when EVN and Wiener Stadtwerke founded the EnergieAllianz Austria.
This nationalization decision set the template for EVN's ownership structure that persists to this day: majority state control with minority private shareholders. The Lower Austrian government believed that electricity was too essential a service—and too critical for industrial development—to be left entirely to market forces. At the same time, the post-war state lacked the capital for massive infrastructure investment, creating the eventual path to partial privatization.
The Rural Electrification Mission
After the end of World War II in 1945, NEWAG set itself the goal of complete electrification of the province. In the alpine foothills and the Waldviertel region, numerous people still lived without electricity. As the last municipality, Harmanschlag in northwestern Waldviertel was connected to the NEWAG grid in 1963. In the post-war decades until about 1980, electricity consumption doubled every ten years.
This rural electrification mission was not merely a commercial endeavor—it was a social contract between the provincial government and its citizens. NEWAG was building not just a business, but the infrastructure of modern life. Every village connected to the grid was a constituency that would support continued state investment.
Through the construction of new power plants, NEWAG kept pace with demand. Already in the 1950s, NEWAG built a hydropower chain on the Kamp river with the storage power plants Dobra-Krumau and Ottenstein, which also created scenic and tourist attractions. Afterward, the company invested more heavily in thermal power plants because the expansion of the Danube, Lower Austria's most energy-rich river, was in the hands of the Verbund consortium.
A Critical Cold War Milestone: The Soviet Gas Deal
In 1954, a decision was made that would transform NEWAG's future—and position Austria as a geopolitical bridge between East and West.
An energy policy watershed was the founding of the Lower Austrian natural gas supplier NIOGAS by NEWAG and the state of Lower Austria in 1954. Beginning with the Baden gas works, NIOGAS purchased municipal gas plants throughout Lower Austria and converted them to natural gas (Baden, Krems, Stockerau, St. Pölten, Wiener Neustadt). Within a few years, a high-pressure pipeline network was laid that enabled the supply of natural gas to the province's energy-intensive industrial operations.
But the truly pivotal moment came in 1968:
In 1968, Austria became the first Western country to sign a natural gas import agreement with the Soviet Union, with NIOGAS as the purchaser of imported gas. The Soviet natural gas covered the strong demand increases of the following decades.
This was Cold War geopolitics embodied in energy infrastructure. Austria's neutral status made it the perfect intermediary—a Western economy that could do business with the Soviet bloc. NIOGAS wasn't just buying gas; it was positioning Austria at the center of European energy transit. The pipelines that would eventually carry Russian gas to Western Europe passed through Austrian territory, and NIOGAS was at the nexus.
In the 1980s, NIOGAS participated in the exploitation of Norway's Troll gas field in the North Sea, and it expanded its supply of natural gas to private households, enabling a large percentage of the population to access this cleaner and more economical energy source.
The Near-Disaster of 1966
Yet this narrative of steady growth conceals a period of severe crisis that nearly destroyed both NEWAG and NIOGAS.
After the turbulent growth phase of the post-war period, NEWAG and NIOGAS fell into severe turmoil in 1966. In the person of the regional politician and NEWAG General Director Viktor MĂĽllner, conflicts between company and provincial interests and cases of improper favoritism of third parties came to a head.
MĂĽllner had to step down from his positions and was brought before the courts. NIOGAS was on the verge of bankruptcy and threatened to drag NEWAG down with it. In 1968, a new management board under General Director Rudolf Gruber was appointed, who succeeded in rehabilitating both NEWAG and NIOGAS with financial support and political backing from the provincial government. A merger of the recovered companies was already under discussion around 1970.
This near-disaster is instructive. State ownership created the problem—political appointees running companies for political rather than commercial purposes. But state ownership also provided the solution—the provincial government's deep pockets and political will to restructure. This dynamic—state control as both risk factor and safety net—would define EVN for the next half-century.
Tax reasons argued against a merger, so NEWAG and NIOGAS were combined in 1972 into a so-called "Vollorganschaft" (full organizational integration)—joint management, joint accounting, identical corporate organization between NEWAG and NIOGAS.
So what does this mean for investors? The pre-history of EVN reveals a company that was never purely commercial. It was built to serve social and political purposes: rural electrification, Cold War energy diplomacy, provincial development. This institutional DNA—the expectation of public service combined with commercial discipline—persists today and explains both EVN's conservative financial profile and its willingness to operate in challenging emerging markets where returns may be lower but infrastructure needs are greater.
II. The Birth of EVN: Merger & Partial Privatization (1986–1997)
The Transformative Merger
By the mid-1980s, the political winds in Austria—and across Europe—had shifted. The nationalization paradigm of the post-war era was giving way to privatization, market liberalization, and the first stirrings of European integration. For NEWAG and NIOGAS, the question was no longer whether to merge, but when.
In 1986, following changes to the country's tax laws, NEWAG and NIOGAS merged to form "EVN AG," representing "Energie-Versorgung Niederösterreich," the energy supply company of Lower Austria. This merger combined their expertise in electricity and natural gas, solidifying EVN's position in the energy sector.
The EVN brand, introduced at the beginning of 1988, stands for Energie-Versorgung Niederösterreich, or Lower Austrian Energy Supply.
The merger created something new in the Austrian utility landscape: a multi-utility that combined electricity generation and distribution with natural gas supply. This was the "multi-utility" model before it became fashionable—the strategic insight that combining different energy vectors under one roof could create operational synergies and customer stickiness.
The IPO: Privatization Austrian Style
The partial privatization of state-owned utility companies in the late 1980s provided EVN with the opportunity to sell a portion of its shares, leading to increased revenue and Group net profit.
The 1980s also brought a political departure from the previous nationalization paradigm in Austria. In 1987, the Second Nationalization Law was amended to allow partial privatization of state-owned electricity companies (51% must remain state-owned). EVN took advantage of this opportunity and went public in 1989 and 1990 in two steps with 49% of its share capital. Very successful years of rising revenues, profits, and stock prices followed.
It is the product of a 1986 merger between NEWAG, a Lower Austrian state electricity company, and NIOGAS, a natural gas and district heat provider. EVN was 49% privatised in two IPOs in 1989 and 1990.
This was "privatization Austrian style"—not the wholesale sell-off seen in the UK under Margaret Thatcher, but a careful balance. The provincial government retained majority control, ensuring that EVN would remain responsive to political direction. But minority shareholders brought market discipline, capital market scrutiny, and the pressure to deliver returns.
The structure has proven remarkably durable. More than 35 years later, the ownership split remains essentially unchanged: The province of Lower Austria is the majority shareholder of EVN, with a stake of around 51%. Since 1990, 49 percent of EVN has been privatized and the Company has been listed on the Vienna Stock Exchange.
Building the Environmental Services Platform
The early 1990s also saw EVN begin its diversification into environmental services—the second strategic pillar that would distinguish it from conventional electricity utilities.
The strategic logic was straightforward: EVN already had relationships with municipalities throughout Lower Austria. It had engineering expertise, project management capabilities, and access to capital. Drinking water supply and wastewater treatment were natural extensions of the municipal services portfolio.
By 2001, EVN formally established EVN Wasser GmbH, marking the formal organizational separation of water services as a business segment. But the groundwork had been laid throughout the 1990s.
The investment case crystallizes here. EVN was deliberately constructing a business model with multiple revenue streams, each with different risk profiles. Electricity generation was exposed to wholesale prices. Distribution networks were regulated monopolies. Natural gas was tied to commodity prices and supply contracts. Environmental services—water and waste—offered long-term municipal contracts with stable, predictable cash flows. The "boring utility" was actually building something more sophisticated: a portfolio of infrastructure assets with intentionally uncorrelated risk factors.
III. EU Liberalization & Strategic Alliances (1995–2004)
Austria Joins the EU: The Liberalization Earthquake
In 1995, Austria joined the European Union.
The EU accession and the subsequent EU-wide opening of the electricity and gas market had far-reaching consequences for EVN, which entered into new cooperations and expanded into Southeast Europe.
Austria's EU accession in 1995 was an inflection point that forced a complete rethinking of EVN's competitive strategy. The EU's electricity liberalization directives would gradually open the Austrian market to competition—ending the comfortable regional monopoly that EVN had enjoyed since the nationalization era.
EVN's response was twofold: form defensive alliances at home, and go on offense abroad.
The EnergieAllianz Austria Formation
In 1998, EVN and Wiener Stadtwerke founded a joint venture, EAA EnergieAllianz Austria, to serve the first liberalized large customer market. Since October 2001, the electricity market has been fully open, including for private households; a year later, the gas market was also fully liberalized.
A decades-long legal dispute over the Vienna suburbs supplied by Wiener Stadtwerke was only settled in the course of market liberalization at the end of the 1990s, when EVN and Wiener Stadtwerke founded EnergieAllianz Austria.
This was elegant corporate diplomacy. EVN and Wiener Stadtwerke had been locked in territorial conflict for decades—disputes over which utility served which Vienna suburb, who controlled which customer relationships. Liberalization rendered these disputes moot: if customers could choose their supplier freely, fighting over geographic boundaries was pointless.
Instead, the two utilities formed a joint venture to defend their combined market position against potential foreign entrants. By pooling procurement, marketing, and customer service, they could achieve scale economies that neither could match individually.
On the natural gas sector, OMV, EVN, and other Austrian companies bundled their forces in ECONGAS GmbH, which handles gas imports and large customer services.
EnBW Enters as Strategic Partner
From 2002 until 2020, German utility EnBW owned around 35 percent of EVN Group.
EnBW's entry was transformative. Here was one of Germany's largest utilities taking a substantial stake in EVN—a validation of EVN's business model and a source of both capital and strategic expertise. For EnBW, the investment provided exposure to the growing Southeast European market. For EVN, it meant an experienced partner with deep pockets.
The relationship would last nearly two decades before changing strategic priorities led EnBW to exit.
Legal Unbundling and Regulatory Compliance
In the course of extensive "Legal Unbundling," a requirement by the E-Control regulatory authority for independent operation of electricity and gas networks, EVN Netz GmbH was founded in 2006 as a 100% subsidiary of EVN AG and renamed Netz Niederösterreich GmbH in 2013.
Legal unbundling—the separation of network operations from generation and supply—was a EU regulatory requirement designed to prevent vertically integrated utilities from discriminating against competitors in network access. EVN complied by establishing separate network subsidiaries with independent management.
This regulatory framework created the structure EVN operates under today: the group holding company owns subsidiaries that operate in generation, networks, supply, and environmental services. Each segment is separately reportable, separately managed, and (for networks) separately regulated.
The investor takeaway: The 1995-2004 period saw EVN transformed from a regional monopoly into a competitive utility with strategic alliances, German institutional backing, and a regulatory framework that emphasized network reliability over pure profit maximization. The domestic market was maturing; growth would have to come from elsewhere.
IV. The Southeast European Gamble (2005–2015)
Key Inflection Point: The Bulgaria and Macedonia Acquisitions
The most aggressive strategic move in EVN's history came in the mid-2000s, when the company placed a major bet on Southeast European expansion.
EVN Group's expansion into South East Europe commenced in 2005 with its entry into the Bulgarian electricity market, where it acquired 67% stakes in the regional distribution companies Elektrorazpredelenie Plovdiv and Elektrorazpredelenie Stara Zagora as part of Bulgaria's privatization process. These acquisitions formed the foundation of EVN Bulgaria, enabling the company to supply electricity to a significant portion of southeastern Bulgaria and marking EVN's first major international venture beyond Austria.
EVN Macedonia is a power distribution and supply company in North Macedonia. It was split in 2005 from former state integrated power company ESM and bought in 2006 by Austrian-based EVN Group.
Macedonia privatized its power company, ElektroStopanstvo na Makedonija (ESM), in March 2006 when it sold 90 percent of the company to the Austrian utility firm EVN.
The strategic logic was compelling: Bulgaria and Macedonia were EU accession candidates (Bulgaria joined in 2007; Macedonia remains a candidate). Their electricity distribution systems were decrepit, underinvested, and plagued by technical losses. Western European utilities with capital and expertise could earn attractive returns while upgrading infrastructure.
The Scale of Operations
EVN Group distributed 19.2 billion kWh of electricity in Austria (37.9%), Bulgaria (37.95%, through subsidiary EVN Bulgaria) and North Macedonia (24.15%, through EVN Macedonia).
By distribution volume, Southeast Europe quickly became as important as Austria itself. EVN was no longer a regional Austrian utility with some foreign interests—it was a Southeast European utility with an Austrian home base.
The EVN Group, since its entry on the Macedonian market in April 2006 until 2025, has invested more than 725 million Euros.
EVN poured capital into these markets—modernizing substations, reducing technical losses, improving customer service, and bringing Austrian efficiency standards to post-communist distribution networks.
The Regulatory Nightmare Unfolds
But the Southeast European adventure came with risks that the initial investment thesis underestimated.
Macedonia:
Claims arising out of EVN's acquisition of Macedonia's national electricity distributor and a decision by a domestic court finding the claimant liable for pre-existing debts to ELEM, Macedonia's state electricity company that used to own the firm, under certain share purchase agreement.
Macedonia's regulatory environment proved challenging. The government had sold the distribution company but retained control of pricing through the energy regulator. When electricity prices were deemed too high by politicians facing public pressure, the regulator squeezed distribution margins. EVN found itself caught between the capital requirements of modernizing infrastructure and the political constraints on pricing.
Bulgaria:
Majority shareholding (67 per cent) in two Bulgarian-based electricity and supply companies. Claims arising out of alleged actions by Bulgarian regulatory authorities and government agencies in relation to the pricing of electricity and compensation for public obligations in respect to renewable energy.
Bulgaria presented different but related problems. The country's renewable energy feed-in tariff regime created obligations for distribution companies to purchase renewable electricity at premium prices. When the regulator failed to pass these costs through to consumers, EVN was left absorbing the difference.
The Arbitration Era
Both situations led EVN to seek recourse through international investment arbitration—a tool available under bilateral investment treaties and the Energy Charter Treaty.
Bulgaria's ICSID arbitration case concerning electricity distribution and supply operations resulted in an €850 million claim dismissed.
The ICSID tribunal rejected Austrian energy group EVN's claims under the Energy Charter Treaty and the Austria-Bulgaria bilateral investment treaty worth €850 million claim against Bulgaria on electricity pricing and renewable energy regulation.
EVN lost its major arbitration against Bulgaria—an €850 million claim dismissed. The arbitral tribunal found that while Bulgaria's regulatory decisions may have affected EVN's profitability, they did not constitute expropriation or denial of fair and equitable treatment under applicable treaties.
The arbitration case brought by EVN against Bulgaria at the International Center for Settlement of Investment Disputes (ICSID) at the World Bank in Washington is over.
The Macedonia arbitration was settled rather than adjudicated, suggesting both parties found a negotiated resolution preferable to continued litigation.
Environmental Services International Expansion
Alongside the troubled electricity investments, EVN also expanded its environmental services business internationally through a different vehicle:
Historically, EVN's environmental services extended internationally through WTE Wassertechnik GmbH, which managed over 120 water supply and wastewater projects in 18 countries, integrating engineering, procurement, and construction expertise.
WTE represented a different model: project-based engineering services rather than permanent ownership of operating assets. EVN would design, build, and sometimes operate water treatment facilities on behalf of municipal or national clients. The risk profile was different—construction risk rather than regulatory risk—but so were the returns.
The sobering lesson: EVN's Southeast European expansion illustrates the risks of utility investment in emerging markets. High returns are available, but so are regulatory risks, political interference, and currency volatility. EVN's experience shaped its subsequent strategy: the company has become far more cautious about major international acquisitions, focusing instead on organic growth in existing markets and divesting peripheral operations.
V. The Diversification Strategy: Beyond Electricity
Telecommunications: Capitalizing on Infrastructure Synergies
In the early 2000s, EVN further diversified domestically by expanding into telecommunications through its subsidiary Kabelsignal AG, which operated cable networks in Lower Austria and later rebranded as kabelplus GmbH. This move capitalized on synergies between energy infrastructure and broadband services, acquiring regional cable assets to offer integrated digital television and internet solutions to customers.
The telecommunications expansion was a natural extension of EVN's infrastructure asset base. The company already had rights-of-way for electricity cables; adding fiber optic cables to the same routes was incrementally cheaper than building from scratch. And the customer relationships developed through electricity supply could be leveraged to cross-sell broadband services.
Waste-to-Energy Innovation
The company's thermal waste utilization plant in Zwentendorf/DĂĽrnrohr has processed over 500,000 tonnes of non-recyclable waste annually since 2004, generating energy while reducing landfill dependency through advanced separation and incineration processes.
The thermal waste utilization plant of EVN in Zwentendorf/DĂĽrnrohr is the largest and most modern in Austria. Since January 2004, household waste, bulky waste, and non-hazardous commercial and industrial waste have been processed there. The capacity of the plant is now 500,000 tonnes per year, with processing around the clock.
The DĂĽrnrohr waste-to-energy plant exemplifies EVN's approach to diversification: identify an infrastructure need (waste processing), apply engineering expertise, and generate both a regulated service fee (from municipalities disposing of waste) and a commodity output (electricity and heat).
The Verbund Stake as Strategic Asset
Perhaps EVN's most underappreciated asset is its shareholding in Verbund, Austria's dominant hydropower company.
EVN itself owns 12.5% of Austrian peer Verbund.
Furthermore, EVN benefits from a strategic liquidity reserve from its 12.6% stake in Austria's Verbund AG, which has a current market value of over EUR 3.0bn.
This stake functions as both a strategic investment and a financial reserve. Verbund's value has fluctuated with European electricity prices—rising dramatically during the 2022 energy crisis—but EVN has held the position through multiple market cycles. The dividends provide recurring income, and the stake could theoretically be monetized if EVN needed emergency liquidity.
District Heating Infrastructure
District heating transportation pipeline with a length of 31 km from Dürnrohr Power Station to Sankt Pölten.
District heating represents another diversification avenue. EVN captures waste heat from its power plants and waste incineration facility and delivers it through insulated pipelines to residential and commercial customers. This creates a use for energy that would otherwise be wasted and provides an additional revenue stream.
The Multi-Utility Model Explained: By combining electricity, gas, water, waste, telecommunications, and district heating, EVN has constructed a business model with inherent counter-cyclical resilience. When electricity prices collapse (as they did in 2014-2016), network revenues and water fees provide stability. When gas prices spike (as in 2022), hedging gains and diversified supply sources limit exposure. No single commodity or regulatory framework determines the company's fate.
VI. Shareholder Evolution & The EnBW Exit (2015–2020)
The German Partner's Gradual Departure
From 2015 on, EnBW reduced its share.
EnBW's gradual exit from EVN reflects shifting strategic priorities at the German utility. EnBW was facing its own challenges—the German Energiewende (energy transition), nuclear phase-out, and massive renewable investment requirements—and concluded that capital tied up in EVN could be better deployed elsewhere.
The exit was orderly rather than distressed. EnBW reduced its stake in stages, allowing the market to absorb shares without dramatic price pressure.
The Wiener Stadtwerke Takeover
In 2020, Wiener Stadtwerke became EVN's second-largest shareholder after it bought EnBW's remaining 28.35% stake, worth around 800 million euros ($894 million).
EnBW Trust e.V. is selling its 28.35% shareholding, held in trust for EnBW Energie Baden-WĂĽrttemberg AG, in the Austrian energy and environmental services company EVN AG. The purchaser is Wiener Stadtwerke GmbH.
"We are pleased to have found a buyer, in Wiener Stadtwerke, that is based in the region and wishes to invest in EVN for the long term. This is a good basis for EVN's future." For Wiener Stadtwerke, the purchase of the shareholding in EVN is "an attractive investment opportunity in a rock-solid Austrian company."
This transaction created what amounts to an Austrian "super-utility" alliance. EVN and Wiener Stadtwerke, partners since the 1998 EnergieAllianz Austria formation, were now united through cross-shareholding. The combination creates significant bargaining power in procurement, shared expertise in decarbonization, and a unified voice in Austrian energy policy.
Current Ownership Structure
The federal state of Lower Austria, whose credit quality Scope deems to be close to that of the Republic of Austria (rated AA+/Stable by Scope), holds a 51% majority stake in EVN through its investment vehicle, NĂ– Landes-Beteiligungsholding GmbH.
The ownership structure today: Lower Austria holds 51% through a holding company, Wiener Stadtwerke holds approximately 28%, and the remaining ~21% floats on the Vienna Stock Exchange. This structure provides strategic stability—the province cannot sell its stake without changing the law—while still subjecting management to capital market discipline.
Investment implications: EVN's shareholder register is remarkably concentrated and remarkably stable. This is not a stock that will see activist campaigns or hostile takeover attempts. But it also means limited liquidity and modest valuation multiples. Investors buy EVN for yield, stability, and defensive characteristics—not for dramatic reratings.
VII. The Energy Crisis & 2022 Stress Test
The Price Shock
The 2022 European energy crisis—triggered by Russia's invasion of Ukraine and the subsequent disruption of natural gas flows—was the most severe stress test EVN had faced since the post-war period.
On Wednesday August 3rd, 2022, EVN and Wien Energie—both part of the Energieallianz Austria (EAA) group—announced they will be increasing energy prices from next month. According to ORF, the increase announced by Lower Austria energy supplier EVN is "substantial" and will apply to gas and electricity. EVN—which is mostly state-owned—blamed the move on price increases on the international wholesale markets.
From September 1st, 2022, customers that get both gas and electricity from EVN should expect to pay at least €100 more a month. Around 50 percent of EVN customers—or those on a "classic tariff"—are expected to be impacted by the price increases.
EEA cited increases on the Austrian Electricity and Gas Index as the reason for the price increase. Since August 2021, the cost of electricity has gone up by 247 percent and gas by 323 percent.
EVN found itself in an impossible position: wholesale energy costs had increased dramatically, but passing these costs through to customers was politically sensitive. The provincial government—EVN's majority owner—faced public anger over energy affordability.
Consumer Backlash and Legal Challenge
The price increases proved legally problematic:
The Consumer Protection Association (VSV) has filed a lawsuit against EVN to demand the refund of revenues from a price increase in September 2022. The Vienna Higher Regional Court ruled that the EVN price increase was inadmissible.
Customers of the Lower Austrian energy supplier EVN can hope for compensation if they were supplied by the company in 2022. This is because the price increase at that time was not legally compliant. The Consumer Information Association (VKI) has agreed on compensation with EVN.
At the beginning of May 2025, EVN will send information letters to more than 300,000 affected household customers. Stefan Schreiner, head of the class action department at VKI, expects reimbursement payments or bonus points "equivalent to several hundred euros."
EVN's price adjustment clause was ruled inadmissible by Austrian courts, requiring the company to compensate affected customers years after the fact. This represents an ongoing regulatory overhang—a reminder that even in emergencies, utility pricing requires careful legal documentation.
Financial Performance During Crisis
Yet despite the challenges, EVN's diversified model proved its worth:
The company's renewable generation assets benefited from high electricity prices. Network revenues remained stable as regulated returns. And the Verbund stake appreciated dramatically as Verbund's hydropower fleet generated extraordinary profits.
Revenue Trajectory Through the Crisis
In the financial year 2023/24, the group reported net revenue of €3,256.6 million and employed approximately 8,006 people.
Revenue peaked during the crisis years as high energy prices flowed through volumes, then normalized as wholesale markets stabilized.
The stress test verdict: EVN survived the 2022 energy crisis without requiring government bailouts (unlike some European utilities), without cutting dividends, and without materially impairing its balance sheet. The diversified model worked as designed. But the legal challenges over price adjustments highlight the regulatory and political constraints under which EVN operates—constraints that limit upside as well as downside.
VIII. Strategy 2030 & The Renewable Pivot
The Climate Initiative Framework
EVN's Strategy 2030 represents the company's comprehensive response to the energy transition—the most significant transformation in the energy sector since electrification itself.
A central measure for the attainment of our goals is the expansion of our renewable generation capacity in our core markets of Lower Austria, Bulgaria and North Macedonia, especially in the areas of wind power and photovoltaics. Plans call for an increase in our annual renewable electricity production to roughly 3.8 TWh by 2030.
The most important levers to decarbonise our company are the significant expansion of our renewable generation capacity and the continued expansion and consolidation of renewable heat generation and the district heating infrastructure. Our focal point for renewable generation capacity is clearly placed on wind power and photovoltaics, with expansion goals of 770 MW and 300 MWp by 2030.
The main lever to reduce emissions lies in the expansion of renewable generation capacity. Substantial progress was again made in this area during 2023/24, and EVN is well underway to meeting its expansion goals for 2030 (wind power 770 MW, photovoltaics 300 MWp).
The Renewable Transformation Already Visible
EVN's renewable transition is not a future aspiration—it's already substantially underway:
The share of renewables in EVN's generation mix has increased dramatically over the past five years. This reflects both the construction of new wind and solar capacity and the retirement or reduced utilization of thermal plants.
EIB Financing Partnership
The European Investment Bank (EIB) has agreed to support EVN AG's investments in wind farms with an overall capacity of 103 MW, providing 72,650 Austrian households with green electricity. The project is expected to be completed by early 2025, and the €110 million loan to co-finance it is part of the EIB's contribution to the REPowerEU plan.
EVN's €600 million annual investment programme is aligned with the company's climate initiative (including CO2 reduction goals agreed with the Science Based Targets initiative) and focuses on network infrastructure (expansion of green electricity networks and substations as well as transformer stations), renewable generation (wind power and photovoltaic projects) and drinking water supplies.
Capital Expenditure Acceleration
Against this backdrop, EVN has increased its ambitious investment programme and now plans to invest 900 million euros per year by 2030. The focal points will include the expansion of the network infrastructure, renewable generation (above all for wind power and photovoltaics), and drinking water supplies.
EVN's capital expenditure program, which rose 22% to over €530 million in Q3 2025, is a cornerstone of its Strategy 2030. The company plans to invest approximately €900 million annually until 2030, focusing on renewable energy expansion, grid modernization, and e-mobility infrastructure.
Sector Coupling Initiatives
We are actively working on initiatives that will allow green electricity to also support decarbonisation in other areas like the heat and transport sectors. For this purpose, we are investing in the expansion of the e-charging infrastructure and in the increased use of heat pumps. In addition to sector coupling, we are working on projects to store the surplus production from renewable energy.
The installation of an additional 500 charging points during 2023/24 increased the number of EVN charging points to 3,000 and make the company Austria's largest charging station operator. Further investments of EUR 100m are planned by 2030 and will service e-autos and e-buses as well as e-lorries and ships.
The TheiĂź Energy Hub Innovation
The first phase of the hybrid storage facility at the EVN site in TheiĂź was officially opened in May 2025. With this, the energy provider is taking the next step in transforming the conventional power plant into a future-ready energy hub. The new storage system is a key technology for the energy transition.
In the next phase, EVN plans to significantly expand the system by installing a battery storage system with a power output of up to 70 MW and a capacity of at least 140 MWh.
"The hybrid storage system combines the advantages of these two types of storage," explains EVN CEO Stefan Stallinger. "We stabilize the electricity grid and make a significant contribution to security of supply. At the same time, we can intelligently convert surplus electricity into thermal energy with almost 100% efficiency."
The TheiĂź project demonstrates EVN's approach to the energy transition: converting legacy thermal assets into flexibility providers for a renewable-dominated grid. Rather than simply retiring gas plants, EVN is repurposing them as stabilization resources while adding battery storage and solar generation to the same site.
Science-Based Targets Validation
The central element of this transition plan—based on the 1.5°C target of the Paris Climate Agreement—is formed by our goals to reduce our greenhouse gas emissions. We submitted these goals to the Science Based Targets Initiative (SBTi) for scientific evaluation, and they were validated by SBTi in April 2025.
EVN's climate targets have been externally validated by the Science Based Targets Initiative, providing third-party assurance that the company's decarbonization pathway is consistent with Paris Agreement goals.
IX. Recent Strategic Pivots (2023–2025)
Refocusing on Core Business: The WTE Divestiture
In June 2025, EVN signed an agreement to divest this international project business, including WTE, to STRABAG SE for approximately €100 million, with closing anticipated by January 2026; this move enables EVN to concentrate resources on its core Austrian environmental operations post-2025.
STRABAG SE, the publicly listed European technology group for construction services, on 10 December 2024 had announced an agreement with the previous owner, EVN AG, to acquire WTE Wassertechnik GmbH. The transaction documents have now been finalised, and the purchase agreement was signed today.
EVN and STRABAG have finalized the transaction agreements for the sale of significant parts of EVN's international project business to STRABAG and signed the share purchase agreement. The purchase price for the shares in WTE Wassertechnik GmbH—which is responsible for the international project business segment within the EVN Group—amounts to EUR 100m. This transaction supports EVN's focus on its core business in line with the consistent implementation of its Strategy 2030.
The WTE sale represents a significant strategic pivot. EVN is exiting the international project development business in water and wastewater—a segment with attractive growth potential but significant construction risk and working capital requirements. The €100 million proceeds will be redeployed into Austrian infrastructure, where EVN enjoys lower execution risk and stronger market position.
Recent Financial Performance
EVN AG's profit for the first three quarters of the 2024-25 financial year fell 9.4% to €434.7 million as weaker renewable generation and a drop in financial income offset higher revenue and operating earnings. Revenue rose 5% to €2.36 billion in the nine-month period ending June 30, driven by higher volumes and prices in distribution networks and sales operations in Bulgaria and North Macedonia.
EBITDA rose 14.2% to €713.6 million, supported by stronger earnings from equity-accounted companies including EVN KG, Burgenland Energie and RAG. EBIT climbed 18.3% to €447.1 million.
The financial result declined to €93.5 million from €164.7 million, mainly because Verbund AG reduced its dividend to €2.80 per share from €4.15 and from currency effects tied to the sale of two combined heat and power plants in Moscow in October 2024.
Electricity generation fell 12.3% to 2,268 GWh, with renewable output dropping 17.5% to 1,789 GWh. Below-average wind and hydropower conditions outweighed capacity expansions. Thermal generation increased to 480 GWh, as the Theiss power plant was called on more frequently for grid stabilization. Renewables accounted for 78.8% of total generation, compared with 83.9% in the prior year.
The recent results illustrate EVN's exposure to weather conditions—below-average wind and water conditions reduced renewable generation despite capacity additions. But the diversified business model partially offset these effects through stronger network and Southeast European operations.
EVN maintains a solid financial position with confirmed external credit ratings. The company projects a net result of EUR 400 to EUR 440m for the financial year, continuing to prioritize shareholder engagement through dividend policies.
X. Leadership Profile: The Quiet Stewards
Stefan Szyszkowitz: The Lawyer-Turned-CEO
Stefan Szyszkowitz, MBA: Born 1964, Master of Laws, Master of Business Administration. Joined EVN in 1993, appointed to the Executive Board of EVN AG in January 2011.
Szyszkowitz, a trained lawyer who from 1987 to 1989 served as chairman of the Austrian Student Union (Ă–H) on the ticket of the Ă–VP-affiliated Action Group (AG), has been with EVN for two decades. He was, among other things, an employee of long-time EVN CEO Rudolf Gruber, later appointed to the board of foreign subsidiaries, and in 2011 to the board of EVN itself.
From October 1, 2017, Stefan Szyszkowitz became Speaker of the Executive Board of EVN AG. He succeeded Peter Layr.
Szyszkowitz represents the typical EVN executive profile: legally trained, domestically rooted, with long service in the organization. His background in the conservative Austrian political ecosystem (the Ă–VP-affiliated student organization) reflects the political alignment of Lower Austria, which has been governed by the conservative Austrian People's Party (Ă–VP) for decades.
Stefan Szyszkowitz is a businessperson who has been at the head of 9 different companies and presently holds the position of Chairman-Supervisory Board for RAG Austria AG, Chairman-Supervisory Board for EVN Pensionskasse AG, Chairman-Supervisory Board at RAG-Beteiligungs-Aktiengesellschaft, Chairman-Supervisory Board of Evn Bulgaria Toplofikatsia EAD, Chairman-Supervisory Board at EVN Bulgaria Elektrosnabdiavane AD, Chairman of EVN Macedonia AD and Chief Executive Officer of EVN AG. Stefan Szyszkowitz is also on the board of 8 other companies.
His numerous supervisory board positions across EVN subsidiaries illustrate the holding company structure: the group CEO also chairs the supervisory boards of major subsidiaries, ensuring strategic coordination.
XI. Playbook: Business & Investment Lessons
The "Boring Utility" Advantage
EVN's century-long survival offers lessons for investors seeking defensive exposure to European infrastructure:
Lesson 1: Diversification as survival mechanism. EVN's combination of electricity, gas, water, waste, telecommunications, and district heating creates natural hedges. When one segment struggles, others provide stability. This is not diversification for growth—it's diversification for resilience.
Lesson 2: State ownership as competitive advantage. EVN's A+ issuer rating reflects a standalone credit assessment of A and a one-notch uplift reflecting the company's status as a government-related entity.
The one-notch uplift in EVN's credit rating—from A standalone to A+ with government support—translates directly into lower borrowing costs. EVN can fund infrastructure investments at rates unavailable to purely private utilities. This advantage compounds over decades of capital-intensive operations.
Lesson 3: The hidden asset. Furthermore, EVN benefits from a strategic liquidity reserve from its 12.6% stake in Austria's Verbund AG, which has a current market value of over EUR 3.0bn.
EVN's Verbund stake—worth over €3 billion at recent valuations—is essentially a "free option" on Austrian hydropower. It provides dividend income, strategic optionality, and emergency liquidity if ever needed.
Lesson 4: Emerging market expansion requires patience and legal preparation. EVN's Bulgaria and Macedonia experiences demonstrate that even well-capitalized, well-managed utilities can find themselves caught between regulatory politics and investment returns. The arbitration losses (Bulgaria) and settlements (Macedonia) were expensive tuition in emerging market risk.
Lesson 5: Long-term infrastructure thinking differs from typical corporate strategy. EVN plans on 50-100 year horizons—the useful life of substations, pipelines, and water treatment facilities. This long-term orientation justifies premium valuations for infrastructure assets but also requires acceptance of lower returns during interim periods.
XII. Strategic Analysis: Porter's Five Forces & Hamilton's Seven Powers
Porter's Five Forces Analysis
1. Threat of New Entrants: LOW
The barriers to entry in EVN's core businesses are formidable. Grid infrastructure requires billions in capital investment and decades to build. Regulatory approvals for new generators face years of permitting. Water concessions are awarded through competitive processes that favor incumbents with track records. The only segment with meaningful new entrant threat is retail electricity supply, where liberalization has enabled new competitors—but EVN's vertical integration and brand recognition provide durable advantages.
2. Bargaining Power of Suppliers: MODERATE
EVN purchases natural gas, coal (historically), and equipment from global markets. For commodity inputs, EVN is a price-taker subject to market forces. For specialized equipment (transformers, turbines), supplier concentration creates some leverage. EVN's hedging strategy mitigates commodity price exposure, but geopolitical events (as 2022 demonstrated) can overwhelm hedges.
3. Bargaining Power of Customers: LOW-MODERATE
For regulated network services, customers have no alternative—EVN is the monopoly distributor. For competitive retail supply, customers can theoretically switch suppliers, but switching rates remain low due to inertia, bundled services, and brand familiarity. Industrial customers have somewhat more leverage in negotiating terms.
4. Threat of Substitutes: LOW (but increasing)
The fundamental services EVN provides—electricity, heat, water—have few substitutes. However, distributed generation (rooftop solar), battery storage, and demand response are gradually enabling customers to self-supply. EVN is responding by offering distributed energy services rather than fighting the trend.
5. Industry Rivalry: MODERATE
In Austria, EVN faces competition from Wien Energie (now an ally through EnergieAllianz and shareholding), Verbund, and regional utilities. The competitive intensity has moderated since the initial post-liberalization period as the industry consolidated. In Southeast Europe, EVN competes with other foreign-owned distribution companies (CEZ, Energo-Pro) but within geographically defined service territories.
Hamilton Helmer's Seven Powers Framework
1. Scale Economies: PRESENT
EVN's network infrastructure exhibits classic scale economies—the marginal cost of serving an additional customer through existing infrastructure is minimal. The company spreads fixed costs across a large customer base.
2. Network Effects: LIMITED
Unlike telecommunications or platform businesses, electricity distribution does not exhibit strong network effects. Adding one customer does not make the service more valuable to other customers.
3. Counter-Positioning: NOT APPLICABLE
EVN is not positioned against incumbents in a way that creates strategic asymmetry. It is itself the incumbent.
4. Switching Costs: MODERATE
Customer switching costs in retail energy are low (easy to change suppliers), but switching away from grid connection is prohibitively expensive. For water and waste services, long-term municipal contracts create contractual switching costs.
5. Branding: PRESENT (regionally)
In Lower Austria, the EVN brand carries recognition and trust built over a century of service. This brand strength supports premium pricing for bundled services and customer retention.
6. Cornered Resource: LIMITED
EVN does not possess unique intellectual property or resources. Its advantage comes from infrastructure assets (replicable, if expensive) rather than irreplaceable resources.
7. Process Power: PRESENT
EVN has developed organizational capabilities in operating complex infrastructure, managing regulatory relationships, and executing long-duration projects. These capabilities are difficult to replicate quickly.
Overall Assessment: EVN possesses moderate competitive moats derived primarily from scale economies, process power, and regional branding. These advantages are sustainable but not impregnable—a well-capitalized competitor with patient capital could theoretically replicate them over time. The practical barrier is that such competition is unlikely given the regulated nature of core businesses and the capital required.
XIII. Key Performance Indicators to Track
For investors monitoring EVN's ongoing performance, three KPIs are most important:
1. Regulated Asset Base (RAB) Growth
The value of EVN's regulated network assets determines the allowed return on equity that regulators approve. Faster RAB growth—through grid upgrades, renewable connections, and infrastructure expansion—directly translates into higher future earnings. Track capital expenditure in the Networks segment and regulatory filings for updated RAB valuations.
2. Share of Renewable Generation
EVN's renewable percentage indicates progress toward decarbonization targets and exposure to carbon pricing risk. Higher renewable share reduces regulatory risk (carbon taxes, emissions trading) and enhances customer proposition (green energy credentials). Track TWh of renewable generation divided by total generation.
3. Scope-Adjusted Debt/EBITDA
The Stable Outlook reflects Scope's expectation of an unchanged robust financial risk profile, as demonstrated by sustained Scope-adjusted leverage (Scope-adjusted debt/EBITDA) of approximately 1.5x and below over the next few years.
This leverage ratio, watched closely by rating agencies, indicates financial headroom for continued investment and dividend payments. EVN has historically maintained leverage below 1.5x; any sustained increase would signal potential rating pressure.
XIV. Bull and Bear Cases
The Bull Case
1. Regulated growth engine: Austria's commitment to 100% renewable electricity by 2030 requires massive grid investment. EVN, as Lower Austria's grid operator, will capture its share of regulated infrastructure spend, earning regulated returns on a growing asset base.
2. Decarbonization premium: As EVN's renewable share increases and carbon footprint decreases, the company may earn a valuation premium from ESG-focused investors. The SBTi-validated targets provide credibility.
3. Hidden asset monetization: The €3 billion+ Verbund stake represents unrealized value. Any partial monetization or dividend increase from Verbund flows directly to EVN's bottom line.
4. Southeast European recovery: If regulatory environments in Bulgaria and Macedonia stabilize, EVN's investments could finally earn returns commensurate with the risks taken. The €725 million invested in Macedonia represents potential upside if conditions improve.
5. M&A optionality: With a strong balance sheet and patient capital, EVN could acquire distressed assets in adjacent markets or segments.
The Bear Case
1. Limited liquidity and growth appeal: With less than 14% free float and state control, EVN will never attract growth-oriented investors or achieve premium multiples. The stock is structurally underowned.
2. Regulatory and political risk: EVN's majority owner is a provincial government. Political priorities (energy affordability, employment) may conflict with shareholder returns. The 2022 price increase litigation demonstrates these tensions.
3. Weather dependency: Renewable generation is inherently weather-dependent. Extended periods of low wind or drought conditions directly impact earnings, as the 2024/25 results demonstrated.
4. Southeast European overhang: The Bulgaria and Macedonia investments remain challenged. Regulatory disputes have been settled or lost, but the underlying political economy—governments facing pressure to keep energy cheap—remains unchanged.
5. Technology disruption: Distributed generation, battery storage, and demand response could gradually erode the value of centralized distribution networks. EVN's grid assets, valued for 50+ year useful lives, may face stranded asset risk if decentralization accelerates.
XV. Regulatory and Legal Overhangs
Investors should be aware of several ongoing regulatory and legal matters:
1. 2022 Price Adjustment Settlement: So far, around 150,000 customers have received the offer, and 70,000 have already accepted it. The settlement with consumer protection associations will result in payouts to affected customers, though the aggregate financial impact appears manageable.
2. Bulgaria Regulatory Framework: While the major ICSID arbitration has concluded (unfavorably for EVN), the underlying regulatory issues—pricing constraints, renewable energy cost allocation—remain unresolved at a policy level.
3. EU Energy Market Reform: The European Commission continues to develop proposals for energy market redesign following the 2022 crisis. Any changes to wholesale market structures, capacity mechanisms, or retail price regulation could affect EVN's business model.
XVI. Conclusion: The Value of Quiet Persistence
EVN Group is not an exciting investment. It does not promise disruption, rapid growth, or dramatic reratings. Its headquarters are not in London, New York, or Zurich—they are in a Lower Austrian town that most global investors have never heard of.
But EVN has survived the fall of the Habsburg Empire, two world wars, the Cold War, EU liberalization, and the 2022 energy crisis. It has done so through a combination of state backing, conservative financial management, and a diversified business model that prioritizes resilience over optimization.
The company was founded in 1922 and is headquartered in Maria Enzersdorf, Austria. EVN AG operates as a subsidiary of NĂ– Landes-Beteiligungsholding GmbH.
For investors seeking European utility exposure with lower volatility than pure-play renewables and lower political risk than emerging market utilities, EVN represents a credible option. The yield is supported by regulated cash flows. The balance sheet is investment-grade. The management team has navigated multiple crises without destroying shareholder value.
The central question posed at the outset—how a regional Austrian provincial utility became a multi-country energy empire—has a simple answer: patient capital, political backing, and the willingness to think in decades rather than quarters. In a world obsessed with disruption and rapid change, EVN reminds us that sometimes the most valuable thing a company can do is simply survive.
Myth vs. Reality Box
| Consensus Narrative | Reality Check |
|---|---|
| "EVN is just a boring regional utility" | EVN operates in 14 countries with >3M customers; Southeast European operations account for ~40% of distribution volumes |
| "State ownership means inefficiency" | State ownership provides a one-notch credit rating uplift, reducing borrowing costs; the 51/49 structure balances political accountability with market discipline |
| "The Southeast European expansion was a failure" | Results are mixed: significant infrastructure investment, but regulatory disputes consumed management attention and legal resources; the ~€850M Bulgaria arbitration claim was dismissed |
| "EVN missed the renewable transition" | Renewables are ~79% of generation; wind capacity expanding toward 770 MW target; SBTi-validated decarbonization goals |
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