Eesti Energia mulling over privatization

  • 2003-07-10
  • Baltic News Service

Eesti Energia, the Estonian energy monopoly, is considering participation in the privatization of Lithuania's two power distribution companies, the media reported last week.
"We want to gather as much information as possible before making decisions on further steps to be taken," Gunnar Okk, CEO of Eesti Energia, said, adding that he did not rule out forming a consortium for the bidding.
The Lithuanian government is set to announce public tenders for the privatization of majority stakes in two power distribution companies — Rytu Skirstomieji Tinklai and Vakaru Skirstomieji Tinklai — this month.
Germany's E.ON Energie, Lithuanian-owned NDX Energija and Finland's Fortum are thought to be potential bidders for the stakes.
An Eesti Energia official said the company might take part in the privatizations only if the investment was going to pay back, said Marko Allikson, board member of the state-owned Estonian utility.
According to Allikson, Eesti Energia wishes to see itself as a leading business on the Baltic electricity and thermal energy market but has not yet decided whether it will participate in the privatization of Lithuanian power grids.
"One has to take into consideration that all decisions concerning the electricity sector made in Latvia and Lithuania most certainly have an impact on Estonia and Eesti Energia too," Allikson said.
"The final decision will be made by our owner - the state," he said.
The task of the management of Eesti Energia is to see to it that the owner would have the most complete information necessary to make the right strategic decisions.
"It makes sense for us to participate in the privatization of the distribution grids in Lithuania only if the investment pays itself back. Our possible participation in the privatization of Lithuania's distribution grids won't have any impact on the Estonian consumer," he said.
Eesti Energia posted a net profit of 367.5 million kroons (23.4 million euros) for the 2002 financial year on sales of 5 billion kroons, a 14.5 percent rise in year-on-year terms.