Lithuania considers own grid merger

  • 2007-03-14
  • By TBT staff
VILNIUS - Lithuania's two grid operators, which were split several years ago for sake of competition and efficiency, are contemplating a merger now that the situation on the European energy market has changed drastically and the Baltic state is focusing on connecting its grids with those of Poland, Latvia and even Sweden.

Rymantas Juozaitis, CEO of Lietuvos Energija, Lithuania's state-owned utility, said a task group is studying alternatives to find the best solution in light of the Baltic state's plan to build a new nuclear power plant together with Poland, Latvia and Estonia.
The goal, explained Juozaits, will be to define the best model "of the national investor company and its possibilities to fund the paramount energy projects, including the interconnection of grids with Poland and Sweden, and the construction of a new nuclear power plant."

This national investor company would include Lietuvos Energija, RST (the eastern power grid) and VST (the western power grid), he said.
VST was privatized in 2004, while RST is still state-owned. Plans to privatize RST would be dropped if such an investor company were formed, Juozaitis said.
The task group, formed by Prime Minister Gediminas Kirkilas, should agree on the concept for the national investor company by March 31. The group comprises officials from the government, Lietuvos Energija, NDX Energija and VST.
NDX Energija is controlled by the owners of Vilniaus Prekyba, the operator of the largest Baltic retail chain and Lithuania's second largest taxpayer.

If the merger plans go through, NDX Energija would lose some control over VST. However, it would gain a stake in the new company and, accordingly, some weight in the management of Lithuania's energy sector. Simultaneously, it would become a stakeholder of the new nuclear power plant and grid interconnections with the West, according to reports.
Authorities will also consider the interests of Germany's E.ON Ruhrgas, which currently owns one-fifth of RST.
Public and energy officials claim that the national investor company must be set up in order to raise enough funds for the construction of the new nuclear power plant, the price tag of which could be as high as 4 billion euros.