RIGA — Latvia may be considering the sale of state-owned energy company Latvenergo, although Prime Minister Valdis Dombrovskis denies this.

Latvenergo board chairman Kārlis Miķelsons and board member Aigars Meļko told the Diena newspaper Tuesday that 20 percent of the company’s shares could be put up for sale at the stock exchange to raise money for investment projects. Prime Minister Valdis Dombrovskis confirmed last week that three enterprises partially or fully owned by state should perhaps be sold: Parex Bank, and telecommunications companies Lattelecom and Latvijas Mobilais Telefons but denied the possibility of privatizing Latvenergo.

Members of Dombrovskis’ shaky ruling coalition disagree with the prime minister.

Economy minister Artis Kampars said the idea is noteworthy. According to Kampars, selling Latvenergo shares would help to avoid state involvement in the second round of the 2nd cogeneration plant reconstruction project. Latvenergo has already planned to borrow €100 million for this project.

NASDAQ OMX Riga board chairwoman Daiga Auziņa-Melalksne is also supportive, saying that being a member of the stock exchange would strengthen Latvenergo’s competitiveness and make its operations more transparent.

Those who support selling the Latvenergo shares argue that Latvian households would be able to buy them and earn dividends and also avoid price increases.

“If Latvenergo was a private company, it would be a very good decision as it would allow the company avoid taking new loans, and the company could get the money it needs without raising tariffs,” Latvian Academy of Sciences President Juris Ekmanis told the newspaper Dienas Bizness.

But critics say the public does not support any privatization measures. In 2000 a national referendum a majority of voters supported retaining Latvenergo as a fully state-owned company. Selling company’s shares would also require amending several laws explicitly prohibiting this. The activists who organized the previous referendum are ready to organize a new one, Free Trade Union Confederation of Latvia Deputy Chairman Egils Baldzēns told the press.

Privatization of different state-owned companies, including Latvenergo has been propagated by former Prime Minister Andris Šķēle, who recently re-entered Latvia’s political scene. Privatization is supported also by Association of Hotels and Restaurants of Latvia President Jānis Naglis and Latvian Chamber of Commerce and Industry board chairwoman Žanete Jaunzeme-Grende. They argue that companies will become more effective and competitive, mentioning the Latvijas Gāze privatization in 1997 is mentioned as a good example.