TALLINN - The development of the underwater power cable between Finland and Estonia is
now in the hands of the power engineering companies involved in the project
as the state officials have already done their job, according to Estonian
and Finnish ministers of economic affairs.
The Estlink project, a 70-kilometer 315-megawatt sea cable that would
connect Estonian and Latvian power suppliers to the Scandinavian power grid,
has been in development for two years.
The cable has been championed as a tool to reduce the Baltics' dependency on
the Russian power supply and is scheduled to be operational by 2005.
Two Finnish companies Pohjolan Voima and Helsinkin Energia will cover
half of the cost of the 110 million euro project.
Finland's Minister of Trade and Industry Mauri Pekkarinen met his Estonian
colleague Meelis Atonen in Tallinn on Aug. 29 to hammer out details.
"In the northern countries we have a properly working free energy market. We
are looking forward for cooperation with the Baltic countries in the energy
sector," said Pekkarinen.
Estonia considers Estlink to be vitally important, and the principal
preparations for the project launch have been done.
"The energy market situation shows us that making this investment [in
Estlink] in the near future is reasonable. In the near future before the
end of this year there will be concrete decisions made by Eesti Energia
regarding Estlink," Atonen said.
"In the long term, Estlink is a very important export channel for Estonia
and is the next step in the development of Estonia's power engineering
sector," he added.
Pekkarinen said that Finland would not like to limit the purpose of Estlink
to being the Scandinavian countries' channel for cheap Baltic kilowatts.
"We would like to view this project as a two-way energy sector cooperation.
Not only Finland will buy cheaper electricity from the Baltics, but in
accordance to the rules of the free market Finnish companies would have an
opportunity to sell to the Baltics as well," said Pekkarinen.
He also said that the Finnish power engineering companies involved in the
Estlink project had received their construction license in 2002 and were now
in the process of investment profitability analysis.
Atonen said that Latvia was also very interested in the project due to the
instability of power deliveries from Lithuania.
"The technical talks between the companies [involved into Estlink] are in
the final stage, and in the next several months we will learn about the
results," Atonen said.
Apart from the cable project, the two ministers discussed Estonia's economic
policy, EU-related issues and the relationship between their two countries.
Finland is the largest trade partner of Estonia, and the latter country's
largest exporter is Elcoteq telecommunication equipment producer based in
the Finnish capital. In the first half of 2003 the trade turnover between
the two nations reached nearly 1 billion euros.
"It is positive for Finland that Estonia is developing so quickly. We get
new challenges because of that. The more Estonia develops the more Finnish
goods and services it will consume," said Pekkarinen, commenting on the
trade relations between the two countries.
"Estonia has actively developed its economy by decreasing taxes and thus
bringing many investments into the country. We cannot prevent Finnish
companies from moving their headquarters to Estonia and establishing
branches here. We even welcome that," said the Finnish minister.
"Finland is also planning to lower the tax burden next," he added.
The two ministers said the incident with alleged double taxation of a
Finnish company's branch in Estonia was likely to be solved this week after
the meeting of finance ministers.
"We do have a valid agreement on avoidance of double taxation. Let's not
make major conclusions out of one case," said Atonen.