LITHUANIA PLEASED WITH OUTCOME OF BALTIC ENERGY

C O N F I D E N T I A L VILNIUS 000231 SIPDIS E.O. 12958: DECL: 04/27/2019 TAGS: ENRG PREL LH SUBJECT: LITHUANIA PLEASED WITH OUTCOME OF BALTIC ENERGY MEETING; PLANS TO MOVE FAST ON SWEDLINK REF: STATE 38591 Classified By: Charge d'affaires a.i. Damian R. Leader for reasons 1.4 (b) and (d). ¶1. (C) Prime Minister Kubilius was happy with the results of the April 26-27 meeting of Baltic prime ministers on energy, according to his advisor Loreta Zakareviciene, who spoke with us April 28. She acknowledged that the declaration, signed by Lithuanian, Latvian, and Estonian PMs (e-mailed to EUR/NB),focuses primarily on creation of the Swedlink electrical link and says little about electrical links with Poland or plans for the Visaginas Nuclear Power Plant but emphasized that the meeting was first and foremost about Swedlink. Zakareviciene added that the only unhappy participants in the meeting were from Latvenergo; alleging that because of the strong Russian influence over them and other Latvian energy countries, they saw it as against their interest to promote projects that will lessen the Baltics' dependence on Russian energy supply. In contrast, she said DG TREN Matthias Ruete was "very happy" with the outcome. ¶2. (C) The declaration clearly states that Swedlink's eastern terminus will be in Lithuania, finally ending the tussle between Lithuania and Latvia on this point. In exchange, it prescribes that the Swedlink project will be "trilateral" (Sweden-Lithuania-Latvia, on equal terms),with non-discriminatory access to the grid. It also calls for shared allocation of the 175 million EUR to be granted by the European Commission for the project. According to Zakareviciene, the precise allocation of these funds is yet to be determined, but the Latvians are seeking 68 million EUR for development of their western transmission grid. The agreement also outlines steps for creating a common Baltic electricity market with the aim of someday integrating it into the Nordic countries' Nord Pool. ¶3. (C) Zakareviciene expressed her fervent hope that seabed mapping critical to the Swedlink project could be done this summer so that construction could begin quickly and be completed as early as 2013. She admitted this was ambitious, but said, "where there's a will, there's a way." ¶4. (C) On the issue of building a new nuclear power plant, Zakareviciene said the topic was discussed. She mentioned the GOL's plans to hire a consultant that will be able to identify an appropriate strategic investor for the project (septel). She added that "the four prime ministers" would need to meet "soon" to discuss next steps. ¶5. (C) Comment: The GOL has for too long tried to focus on too many energy projects at once, resulting in not enough focus on any one. It has not lost sight of its plans for a new nuclear plant and a power bridge with Poland, but is throwing its weight behind a project that has both the financial and international support that make it credibly possible in the near term. If it can get this project off the ground, it will be on its way toward some measure of energy independence for the Balts, and might renew some confidence among its neighbors that it is capable of tackling bigger projects as well. LEADER