VILNIUS - The Lithuanian electricity holding company Leo LT, along with energy-company executives from Estonia, Latvia and Poland, agreed July 3 to continue talks on a joint project to build a new nuclear facility to replace the Ignalina plant, which is slated to shut down in 2009.
"We continue intensive and constructive work with partners. Today we have discussed the current situation. All parties have put forward their proposals, which the task group will enter in a future agreement between the partners," said Leo LT chairman Rymantas Juozaitis.
Leo LT, the management vehicle, which is 61.7 percent Lithuanian government-owned, with 38.3 percent held by private investor NDX Energija, suggested earlier this year that a joint venture be set up by the end of this summer between the energy companies of the four countries, saying that such a plan would help save time until a political agreement on the planned new nuclear power plant was reached. The partners back the idea but have doubts on the proposed distribution of shares.
"This company will be established by Sept. 1, but the key provisions which have to be included into the agreement are still being worked out," said Juozaitis on Lithuanian television's "Panorama" news program.
The next meeting between the executives of Leo LT, Polska Grupa Energetyczna, Latvenergo and Eesti Energija is scheduled for Stockholm on July 25.
Leo LT has proposed that it hold a 51-percent stake in the project, with the remaining shares to be divided equally among its partners.
This remains to be decided, as Juozaitis says that Leo LT's partners are worried that the same model would be applied in distributing ownership stakes in the company that will ultimately build and operate the new facility. But without knowing the plant's total capacity and the terms of the project's financing, it is too soon to decide on final ownership distribution.
The Polish, Latvian and Estonian energy companies are awaiting the results of an ongoing environmental impact study, the first results of which are due in late August, which will determine the operating capacity. The power needs of all four countries will be met only if the new plant can generate over 3,000 megawatts.
The design and preparation of the project under discussion would take a couple of years, after which the proposed joint venture would then be liquidated or converted into a company that would build and operate the new power-generating facility.
Leo LT suggests that it control 34 percent of shares in the new plant's operating company and that the other partners hold 22 percent each.
Backed by its partners, completion of the new nuclear power plant is projected for 2015 to 2018. Additional projects for Leo LT, if approved, involve construction of power bridges to Poland and Sweden, to be completed by 2013 to 2016.
Lithuania currently relies on Ignalina Nuclear Power Plant (INPP) for 70 percent of its electricity needs and, considering the consequences of shutting off the power next year, hopes to continue operations at Ignalina until the new facility is ready.
Lithuania's Minister of Economy Vytas Navickas told the participants at an informal meeting of the European Union council of energy ministers in Paris that the optimal solution would be to continue INPP's operations until the completion of a new nuclear power plant or power links with Poland and Sweden.
The minister also urged them to consider Lithuania's exceptional economic and energy circumstances when discussing early closure of Ignalina and the relevant energy measures and compensatory schemes.
