In Brief - 2002-07-25

Wind power

A building company from the Estonian island of Saaremaa will build three wind generators that should start operating in October. Two of the generators will belong to the Saaremaa company Roheline Ring and the third to state power utility Eesti Energia. The generators' total output will be 1.8 megawatts worth of energy.

German wind generator producer Enercon is supporting the project with 420,000 euros ($424,200). According to Kruus, this irrecoverable loan will cover 40 percent of the two generators' cost. (Baltic News Service)

Estonia bond issue

Eesti Energia last week announced it arranged a 200 million euro ($202.02 million) bond issue with a term of seven years. Investors have subscribed to the bonds to the tune of more than 300 million euros.

Financial Director Sandor Liive said the 6 percent fixed interest of the bonds is based on that of German government bonds to which a margin will be added.

Of the investors, 35 percent came from Great Britain, nearly 25 percent from Germany, 11 percent from Scandinavia, 10 percent from Ireland and 4 percent from the Baltic countries. The remaining European investors accounted for a total of 16 percent. (BNS)

Power surge

The Latvian Economy Ministry this year expects electric power consumption to grow some 4 percent to 5 percent this year as compared to last year, the ministry said in its development report.

Electric power supply this year is estimated at 6.16 billion kilowatt-hours as opposed to 5.92 billion kwh in 2001.

Of this amount, 2.8 billion kwh are to be produced at hydropower plants, up from last year when this figure was 2.79 billion kwh.

Thermal power plants are expected to generate 1.24 billion kwh this year, a 7 percent growth from 2001 when these facilities produced 1.16 billion kwh.

Estimated electric power imports in 2002 were given at 1.88 billion kwh, up 5.4 percent from 2001 when Latvia imported 1.78 billion kwh of electric power. (BNS)

Bidders drop out

Three out of eight potential buyers of the Kauno Elektrine power plant, a subsidiary of the municipal heating utility Kauno Energija, have withdrawn from the competition.

Kauno Energija CEO Mindaugas Juozaitis said the U.S. National Fuel Company, Turkey's AK Enerji and Denmark's Elsam had informed him about their withdrawal in writing.

All the companies had qualified for the tender and purchased sets of documents fort 5,000 euros ($5,050) each. They cannot claim the money back.

"They saw other competitors and apparently realized that they have no chances to win," Juozaitis said, commenting on possible reasons behind the investors' decision to pull out.

The Russian gas company Itera, a consortium formed by Russia's gas giant Gazprom and the local natural gas importer Dujotekana, the Lithuanian nitrogen fertilizer producer Achema, a consortium of the German energy companies Verbundnetz Gas and Stadwerke Leipzig, and Finland's Fortum Oy have expressed their interest in buying Kauno Elektrine, the first power plant put up for sale in Lithuania.

Potential investors are to submit their offers by Aug. 7. The winning bidder is planned to be announced in late August.

Kauno Elektrine's balance-sheet value is over 100 million litas ($29.15 million). The municipality of Kaunas owns 85.21 percent of shares in Kauno Energija. (BNS)

Electricity sale put off

Privatization of Lithuania's two electricity distribution network operators will not get underway this year and is likely to start in the first quarter of 2003, Economy Minister Petras Cesna said.

The government had planned to begin the privatization of Vakaru Skirstomieji Tinklai and Rytu Skirstomieji Tinklai in the last quarter of 2002.

Cesna said it had been decided to reschedule the privatization dates, as the government wants to see the companies' operating results for the current year.

The government will offer at least 51 percent of shares in the two companies, and retain a 34 percent holding.

According to preliminary data provided by Cesna, VST mad a profit of around 15 million litas in the first half of this year, while RST had a profit of about 13 million litas.

The government owns 85.72 percent of shares in each of the companies, and the German company E.ON Energie holds a 10.9 percent stake. The remaining shares are held by small investors. (BNS)

Fully insured

Insurance companies operating in Lithuania wrote a total of 398.6 million litas' ($115.54 million) worth of direct insurance premiums over the first half of this year, an 87.5 percent increase year-on-year, according to data from the State Insurance Supervisory Authority.

Total non-life insurance premiums amounted to 340.6 million litas during the first six months of 2002, while claims paid out by non-life insurers came to 99 million litas.

Life insurance companies wrote 58 million litas' worth of insurance premiums and paid out 24.8 million litas in claims. (BNS)