VILNIUS - At long last, Lithuania and Poland have established a joint venture for building the much-anticipated and desperately needed energy link between the two countries, while the Lithuanian government and a private firm inked the charter documents for Leo LT, the so-called national investor that will oversee the planned nuclear power plant.
The CEOs of Lietuvos Energija (Lithuanian Energy) and Poland's PSE in Warsaw signed documents for the joint venture 's LitPol Link 's that will carry out a 237 million euro energy link popularly known as the "power bridge."
The link is extraordinarily important for Lithuania's economy, which will become an energy importer after the Ignalina nuclear reactor shuts down at the end of 2009. Brussels has given the project priority status.
The two sides agreed that LitPol Link will prepare a technical project, plan routes for new power lines, carry out an environmental impact study, deal with land ownership and licensing issues, and complete other preparatory work.
The new company will also secure financing for the project.
Separately, Poland will invest 650 million euros and Lithuania 262 million euros to invest in existing infrastructure in their countries to make the two systems compatible.
Lietuvos Energija and PSE Operator will each hold 50-percent interest in the joint venture.
Also, LitPol Link's supervisory board appointed Vidmantas Jankauskas, former chairman of the Lithuanian National Commission for Prices and Energy, as chief executive officer and Albert Kuzmicz as deputy.
In Vilnius, the government and NDX Energija, a private firm that owns the western half of Lithuania's energy grid, on May 20 founded Leo LT.
Economy Minister Vytas Navickas and NDX Energija CEO Ignas Staskevicius approved Leo LT's articles of association and elected its supervisory board.
Leo LT will combine the energy utility Lithuanian Energy and the two grid operators, RST and VST (the latter owned by NDX).
The agreement came after months of delays and bickering across the political spectrum. At one point relations deteriorated so badly it appeared the deal would fail.
Opposition politicians tried to block Leo LT's creation, while the influential British weekly, The Economist, blasted Leo LT as unnecessary.
Shortly after the deal is signed, the supervisory board will meet to elect its chairman and a five-person management board.
The new company will act as an investment vehicle for Lithuania's multi-billion-litas energy projects, such as the new nuclear power plant in Ignalina and energy links with Poland and Sweden.
The government will hold 61.7 percent of shares in Leo LT, while NDX Energija, which is owned by the stakeholders behind Baltic retail leader Vilniaus Prekyba, will own a 38.3 percent stake.
