According to the Visaginas nuclear power plant's business plan, which was submitted to the Lithuanian parliament last Friday, Eesti Energia and Latvenergo could use their own funds and borrowed funds to finance their investments, estimated at around 1 billion euros for each company, during the project implementation period of five to seven years.
In the first stage, before a final investment decision is taken in 2015, the Estonian and Latvian energy companies would have to invest 10 million to 60 million euros each and could use their external resources for that purpose.
It is said that Eesti Energia has told the European Commission that it plans to use the Estonian government's capital contributions to the company, as well as funds raised through various market instruments, such as Eurobonds, to finance its investments.
Latvenergo could finance about 50 percent of its investments from its own resources and the other 50 percent from borrowed resources - bonds or bilateral loans, depending on the situation in financial markets.
Moody's Investors Service said in a comment on Monday that Baltic energy companies would find it challenging to raise funds for the planned new nuclear power plant in Lithuania.
The international ratings agency said the project would be "credit negative" for Eesti Energia and Latvenergo due to "large capital commitments and the execution risk associated with construction".
Under a draft concession agreement that was formally approved by the Lithuanian Cabinet last week, Japan's Hitachi, the strategic investor, would own 20 percent of shares in the Visaginas plant and Lithuania would hold 38 percent. Latvia and Estonia would take stakes of 20 percent and 22 percent, respectively.
The Visaginas project is estimated to cost up to 5 billion euros at current prices and around 6.8 billion euros including interest, inflation and changes in the investment's value due to exchange rate fluctuations. It is said that around 4 billion euros could be borrowed, while own funds invested by VAE, the Latvian and Estonian companies and Hitachi would make up the remaining 2.8 billion euros.
2012-05-16 11:30
Latvian and Estonian energy companies able to finance Visaginas Nuclear Power Plant
Government-controlled energy companies Eesti Energia of Estonia and Latvenergo of Latvia are capable of meeting their financial commitments related to investments in a new nuclear power plant that is planned to be built in Lithuania.
Andrius Kubilius in „Hitachi Works“ plant / lrv.lt nuotr.
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