EU to Decide on Lithuania LNG Plant Loan by End 2013

October 4, 2013

The European Commission expects to rule on the legality of Lithuanian state guarantees for a loan to build a LNG terminal by end of this year, the EU executive said on October 3, Reuters has reported.

The European Investment Bank (EIB) agreed to grant a 87 million euro loan in July after the company in charge of the project, Klaipedos Nafta, failed to raise funds from commercial banks.

"We are advancing a state aid case regarding financing the LNG terminal in the Klaipeda seaport ... I hope we can conclude this decision by the end of the year," European Union Competition Commissioner Joaquin Almunia told journalists.

"We are assessing whether the investment is compatible from the point of view of state-aid control," he added.

The loan will only be released if the Commission approves the guarantees, a spokeswoman for the Energy Ministry said.

Klaipedos Nafta has said the 20-year loan from the EIB will cover as much as 50 percent of infrastructure investment costs estimated at 600 million litas ($236.7 million).

It still needs to raise 100-150 million litas. The company has agreed to lease for 10 years a floating storage and regasification unit (FSRU) from Norway's Hoegh LNG.

Copyright: Reuters, 2013.