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Latvian hydropower plants receive EBRD financing
In order to meet peak power demand in the Baltic region, the European Bank for Reconstruction and Development (EBRD) is providing a US$ 34.1 million (ECU 26.2 million) loan to upgrade two hydropower plants in Latvia, Plavinas and Kegums. The loan, part of an overall investment programme of US$ 76.2 million, is to be implemented over the next five years by Latvenergo, Latvia's state-owned electricity utility and current provider of peak power to the region. This overall investment programme will also fund an upgrading of safety and environmental protection along the Daugava River.
Signing in Riga were Aivars Guntis Kreitus, Minister of Finance for the Republic of Latvia, and Edgars Birkans, from Latvenergo. On behalf of the EBRD, Juuso Salokoski, Resident Representative for Baltics States, said: "With the EBRD's loan the overall operational efficiency of the two plants will be improved, their lifetime extended and the operating, maintenance and repair costs reduced. Via its financing programme the EBRD is supporting the commercialisation of the power sector."
Once upgraded, the Kegums and Plavinas plants, which have a total capacity of 1,100 MW, will be able to generate more power from the river flow. Capacity provided by the stations will be increased to ensure that peak demand in the Baltic countries can be met, and that the stations can continue their role as a reserve, should there be a sudden loss of supply elsewhere in the system.
The loan by the EBRD is guaranteed by the Republic of Latvia. The EBRD has mobilised co-financing from the Japanese Export-Import Bank, the European Investment Bank, and export credit agencies under the EBRD's Export Credit Loan Arrangement Technique (ECLAT) procedures. This will be the first application of the ECLAT financing instrument in the Baltics. A technical cooperation programme funded by the Norwegian Government is aimed at safety improvements in the plants' operations.
Latvenergo is a 100 per cent state-owned joint stock company. It is responsible for all production, transmission, distribution, trade and sale of electricity, and for 70 per cent of Riga's district heating supply. It owns and operates the three hydropower plants along the Daugava River (Kegums, Plavinas and Riga) and two thermal plants (TEC-1 and TEC-2). Latvenergo employs 7,000 staff, of which 350 work at Kegums and Plavinas, which are 55 and 30 years old respectively.
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