RIGA — The Latvian government will soon decide whether it can spend €60 million on the undersea power cable that will link the country and Lithuania to Sweden and the European power grid.

The Latvian state-owned power utility Latvenergo needs to invest into the cable that will run from Sweden to Lithuania, freeing the two Baltic countries partly from their dependence on the Russian energy grid, which they are now exclusively linked to.

The decision should have been made on the amount this week, but other fuss over the central government budget has put it on the backburner.

The sum will be reviewed next week, it is expected.

Latvenergo will be an equal partner together with the energy companies of Lithuania and Sweden in the venture. Each party will own one-third of the new venture.

Under the condition that implementation of the project gets underway by 2010, the European Union has pledged €175 million for construction. Latvia would receive one-third, which Latvenergo would use to develop the energy grid in the Kurzeme province.

The project’s initial goal for 2012 completion turned out to be a pipe dream after previous governments of Latvia and Lithuania squandered years of time arguing about where the cable would land. Each country wanted the cable for themselves, but ultimately the route to Lithuania was chosen as the most suitable route.

The heads of government of the Baltic states and Sweden finally agreed on the construction of the energy cable in April this year. The project is budgeted between €516 million and €738 million.

The underwater cable will be approximately 350 km long and will optimistically be finished by 2016.

The cable agreement came alongside the three Baltic countries’ decision to make an open energy market removing tariffs for selling power to one another. The new energy market takes effect at the start of 2010 and is expected to make energy cheaper for consumers.

Lithuania needs the link to Sweden and other energy solutions as its nuclear power plant will shut down Jan. 1 of 2010 in accordance with the country’s EU accession agreement. Lithuania is planning to build a replacement nuclear power plant by the end of next decade, a project Latvia is also interested in.