RIGA - Latvia’s Finance Ministry has supported purchase contracts by Latvenergo which are connected with the second stage of the Riga heating and power station TEC-2 reconstruction project, says ministry spokeswoman Baiba Melnace, reports news agency LETA. The ministry’s positive evaluation of stage two development of the TEC-2 reconstruction work was submitted by Latvenergo, based on the economic justification for the project, as well as on a report by the State Treasury which showed that there was no reason to believe that the purchases connected with the project would cause any threat to the company’s future liquidity.
The cost for the next phase upgrade was reduced, by 20 million euros. This will be the country’s largest and most significant investment project, said to provide substantial investment in the economy and to provide at least 500 new jobs in the construction industry for specialists working in Latvia.
The Finance Ministry outlined even more positive aspects of the project, namely, that TEC-2’s reconstruction will guarantee Latvia’s energy self-sufficiency, as well as helping to stabilize natural gas consumption and significantly increasing the international competitiveness of Latvenergo.
Energy independence claimed by officials, however, is questionable, as gas powering the plant still comes from Russia. The upgrade of the plant also isn’t being designed to burn biomass, or other domestically-sourced inputs.
The Economy Ministry gave its approval for the project last week. The ministry said that this project will require investment of around 360 million euros. The tender was won a year ago by the Turkish company Gama, offering to build the 400 megawatt energy bloc. The ministry had earlier called the price tag, at 350 million euros, too high, and urged a repeat review of the project.