VILNIUS — The Lithuanian government, which controls LEO LT’s majority stake, voted to dissolve the company at a shareholder’s meeting today. Exactly how this will happen remains in dispute, though, with the minority shareholder NDX Energija, a VP Grupė subsidiary, asking for compensation.
The vote culminates the slow death of the company designated by the government to replace the Ignalina Nuclear Power Plant, Lithuania’s principal electricity source. The Ignalina plant supplies 70 percent of Lithuania’s electricity but will be shut down at the end of the year as one of the conditions of Lithuania’s accession to the European Union.
LEO LT's problems have delayed the replacement of Lithuania's primary electricty source, the Ignalina Nuclear Power Plant, due to go off-line at the end of the year. Photo used courtesy of Radio Nederland Wereldomroep.
The founding of the LEO LT joint venture was declared unconstitutional in March.
Set up by the previous Social Democratic government, LEO LT came under heavy criticism from the ruling conservative coalition and President Dalia Grybauskaitė who characterized the company as oligarchical.
The energy sector is a target of the business competition law reform the government is proposing.
“The energy sector is the most important,” Linas Balsys, one of the president’s chief advisers, told Baltic Reports about the reforms. “Lithuania and also the other two Baltic states are an energy island. This is a big problem, it causes isolation. Also there are monopolies, so the consumer doesn’t have choice.”
NDX Energija disagrees with the government’s decision to dissolve LEO LT. Ignas Staškevičius, NDX Energija’s director, said he doubted that the company would be working with the government for any future nuclear power project.
“What I understand is we are not welcome in a partnership with the government anymore, this is a clear message. We accept that so we’re looking for an exit scenario,” Staškevičius told Baltic Reports. “We didn’t support the idea of liquidating the company. There was no plan which convinced us, the shareholders. On the contrary the plan the government people came up with is not about liquidation of the company, it’s just more declarations about the direction to follow.”
Today’s vote was only a declaration of intention. The actual liquidation process has yet to be determined. NDX Energija is seeking compensation for its initial investment in the company, which includes 608 million litai and power infrastructure properties. Energy Minister Arvydas Sekmokas said today that the government wanted to finalize LEO LT’s dissolution before the end of the year.
