German-Russian firm eyes Lithuanian thermal power plant

VILNIUS (BNS) - TNG Holding GmbH, a German-Russian joint venture, is willing to invest in Lithuania's Elektrenai thermal power plant as part of a project to connect the Lithuanian electricity network with western Europe.

Lithuanian Economy Minister Valentinas Milaknis met with TNG Holding representatives on Aug.18.

"The guests were interested in the possibility of investing in the Elektrenai power plant," Milaknis said. "They believe that the power bridge project will not pay off unless investments are made in this plant."

Milaknis said the company's investment possibilities were "interesting," but added that the present Cabinet was unlikely to make decisions on the plant's privatization, with less than two months left before the general elections in Lithuania.

A plan for the reorganization of Lietuvos Energija calls to separate the Elektrenai facility from the state-owned energy company so that it could be leased or privatized in the future.

The Elektrenai plant is currently operating at a minimum capacity and is used as a back-up to the Ignalina nuclear power station, but experts see the Elektrenai facility as an important power generating source in Lithuania following the planned decommissioning of the first unit at Ignalina.

"The German-Russian company has experience of operating in western energy markets. Also, it runs gas wells in Russia and could ensure the plant's profitability by supplying cheap gas," Milaknis said.

TNG Holding's annual gas and oil production volumes in Russia reached 2.04 billion cubic meters and 136,700 tons in 1999 respectively.

Decisions on the future of the Elektrenai plant will largely depend on the size of financial support for the electricity link-up project from international structural funds, Milaknis said.

The project, estimated to cost around 380 million euros, is to be submitted to the European Commission for consideration by the end of this year, the minister added.