Concession agreement signing for Visaginas NPP postponed to end-2012 - Lithuanian minister
VILNIUS. June 25. (Interfax) - Lithuania will sign a concession agreement with the strategic investor in the future Visaginas Nuclear Power Plant (NPP) (Visagino Atomine Elektrine) - Japanese corporation Hitachi - by the end of this year, instead of by June 28, as previously planned, Lithuanian Energy Minister Arvydas Sekmokas told Interfax.
"This was done in order for us to be able to continue negotiating with our regional partners and with Hitachi. Now the partners should agree on a schedule for interim steps and final dates," he said.
The formal date, according to which direct negotiations with Hitachi were supposed to be wrapped up and a concession agreement signed by June 28, was established by the law on concession. However, the Lithuanian parliament (Seimas) canceled this date after adopting the law on the new NPP's construction on June 21.
"This means that the negotiators have been provided with the opportunity to continue negotiations with regional partners and the strategic investor until an agreement on the shareholder agreement is reached and until the company to implement the project has been established," Advisor to the Energy Minister Kestutis Jauniskis told Interfax.
Lithuania, Hitachi and a not-yet-created company tasked with implementing the project are supposed to sign the concession agreement.
"Once the negotiations finish and the company to implement the project has been established, at the same time as the concession agreement is signed, there are plans to sign a contract on the general contractor with Hitachi-GE, as well as other agreements that are necessary to implement the project," Jauniskis said.
At the beginning stages of the project, the company will have two shareholders - VAE-SPB (a subsidiary established by the state-owned company Visagino Atomine Elektrine to implement preparatory work for the project) and Hitachi Visaginas Project Investment. Latvian company Latvenergo and Estonian company Eesti energia will join the project later. Hitachi should get 20% of the future joint venture's shares, Lithuania should get 38%, Latvia - 20% and Estonia - 22%. If Poland decides to join the project, these proportions could undergo slight changes.
After the concession agreement is signed, design work will begin, which will last roughly 30 months and cost about 283 million euro. This work will include the project's technical preparations, site and foundation preparations, receipt of a building permit, the issuance of a license and equipment designing and ordering.
Later, a tender will be held to select a contractor to build the NPP. Only after a contract is signed with the contractor and an agreement is reached on financial obligations will a final investment decision be signed (which, as expected, should be done by no later than March 31, 2015).
Construction of the new NPP is estimated to cost up to 5 billion euro. Taking into account forecast inflation and changes in the cost of investment as a consequence of fluctuations in exchange rates, it could cost about 6.8 billion euro. Presumably around 4 billion euro will be raised in the form of loans, and 2.8 billion euro will be invested capital by Visagino Atomine Elektrine, the Latvian and Estonian energy companies, and Hitachi.
However, political scientists believe that the laws on the NPP adopted by the Lithuanian parliament still do not guarantee that the project will be continued and implemented as the current Lithuanian authorities plan. Today's ruling coalition might lose its majority after the Seimas elections in October, and the opposition Social Democrats did not support these laws.
Lithuania is planning to build its new NPP next to the Ignalina NPP, which was closed in 2009. The government hopes for the Visaginas NPP to be built by 2020-2022.