• 2002-04-04
POWER DEAL: Lithuanian electricity provider Lietuvos Energija on March 29 signed a long-term export agreement with the Russian energy company Inter Rao Ues. Under the agreement, the Russian company will keep exporting Lithuanian electricity to Russia's Kaliningrad region and Belarus. It also provides the possibility of exporting power to Poland. "The agreement will provide for the use of the Ignalina nuclear power plant until late 2004," according to a Lietuvos Energija statement. Lithuania is planning to close Ignalina's first power unit by 2004. Lietuvos Energija reportedly expects to raise the price of exported electricity by 10 percent this spring and start exporting electricity to Poland and Ukraine. Inter Rao Ues currently pays 4.4 Lithuanian centas ($0.01) per kilowatt-hour for electricity exports to Belarus and 4 centas for exports to the Kaliningrad region. The agreements between Lietuvos Energija and Inter RAO UES on exports to Belarus and the Kaliningrad region expire on June 1 and Sept. 1 respectively. The Russian company is expects to purchase 5.7 billion kwh of electricity this year and 6.9 billion kwh in 2003. (Baltic News Service)

TRADE GAP: Latvia's current account deficit this year should be about 8 percent of the gross domestic product, according to Bank of Latvia monetary policy economist Zoja Medvedevskiha. She stressed that the estimate could fluctuate with changes in the world economy. Latvia has been pressured by the World Bank and the International Monetary Fund to lower its current account deficit, which last year was 10.1 percent of GDP. In 2000 Latvia's deficit was 6.9 percent of GDP. Medvedevskaya said the government must adhere to disciplined fiscal policy despite the fall parliamentary elections. An increase in imports last year, mostly heavy equipment, and dragging exports were to blame for the high current account deficit. The deficit last year totaled 476.8 million lats ($745 million), the highest in the three Baltic countries. Estonia's deficit last year was 6.5 percent of GDP, while Lithuania posted a deficit of 4.8 percent. (BNS)

BUTINGE BACK: Lithuania's Butinge offshore terminal began loading again last week, its first business since November's loading accident. Company spokesman Tadas Augustauskas said that the first tanker began loading on March 27. The Panama-registered tanker Ross Sea began loading 86,000 tons of crude oil delivered for export by the Russian oil group Yukos. The Butinge terminal, built in 1999, has been out of operation since a loading accident on Nov. 23, when nearly 60 tons of oil spilled into the Baltic Sea. Terminal owner Mazeikiu Nafta said it had made a number of improvements in the terminal's offshore buoy equipment and loading procedures since the accident. During the closure Butinge lost some 2 million tons in business. Mazeikiu Nafta expects to export up to 7 million tons of oil via Butinge this year, but it might have to revise its plans due to the accident. Last year, oil export volumes through Butinge reached 5 million tons. (BNS)

LOGGING: Estonia cuts much more timber than EU countries, according to a recent report from the Estonia Nature Fund. Estonia currently has an unsustainable logging policy, according to the environmentalist group. In recent years Estonia has cut an average of 5.7 cubic meters per hectare of forest. Sweden and Finland cut 2.5 cubic meters per hectare, while Latvia and Lithuania cut 2.8 and 2.9 respectively. The Estonian State Forest Management Center has proposed a reduction in timber volumes. (Baltic Business News)

FARM AID: Estonian Agriculture Minister Jaanus Marrandi said following a meeting of agriculture ministers in Brussels that an increase in European Union agricultural subsidies was almost impossible, the Estonian newspaper Postimees reported. But the 10-year transition period proposed by the European Commission could be shortened, he added. Marrandi said that Estonia should focus on the debate over production quotas. He said that if Estonia failed to negotiate better quotas, Estonian farmers might not support the country's membership in the EU. Former Agriculture Minister Ivari Padar said that the EU should offer higher subsidies as the requirements for the Estonian agricultural sector were equal to those in the EU member states. Estonian farmers must invest more than farmers in the member states, and therefore the higher subsidies would be justified, he said. Estonian newspapers are arguing that Estonia should not give up its demand to establish equal terms for competing with the current member states. (BNS)

AIR JOBS: Denmark-based Maersk Air, a strategic shareholder in Estonian Air, will move its technical maintenance and air support services to Estonia, creating 35 new jobs. Maersk Air has invested more than 10 million kroons ($588,000) to upgrade facilities in Tallinn. It currently operates 21 Boeing aircraft in addition to two operated by Estonian Air. Erki Urva, vice president of Estonian Air, said that setting up a unified technical maintenance center enables both airlines to cut costs and for Estonian Air to earn millions of kroons in rental income. Maersk Air owns 49% of Estonian Air, which currently employs 400 people. (BBN)

DALKIA TAKEOVER: The French energy company Dalkia on April 1 took full control of the Vilnius' heating company Vilniaus Silumos Tinklai. Executives from Vilniaus Silumos Tinklai and Vilniaus Energija, Dalkia's Lithuanian subsidiary, signed a deed of transfer on March 29 to close the deal, which had been planned for more than a year. Dalkia also manages the heating systems in other Lithuanian towns. Under the deal Dalkia has promised to invest about 700 million litas ($176.77 million) in the capital city's heating network over the next 15 years and reduce residential heating charges by 5 percent. (BNS)