Energy, EU – Baltic States, Investments, Legislation, Lithuania

"We have received a notification from the International Centre for Settlement of Investment Disputes (ICSID) about Veolia's request for arbitration. We are currently analyzing the material provided, but the first impression is that most of the allegations seem to be unfounded. For example, they express their dissatisfaction over cases lost in courts or accuse supervisory authorities of investigating the activities of heat suppliers," the minister told BNS.

According to him, procedural documents will be prepared and submitted to the ICSID after the information provided is analyzed.

Veolia, which has been present in Lithuania for around 20 years and has invested about 200 million euros in the country's heat sector, filed its request for arbitration with the ICSID in Washington last week.

The company said that it was seeking compensation for losses suffered by its Lithuanian subsidiaries, Vilniaus Energija (Vilnius Energy) and Litesko, due to allegedly unfair and discriminatory changes in laws and regulations.

Malika Ghendouri, Veolia's vice-president for Central and Eastern Europe, said at a news conference in Vilnius last week that there had been around 50 changes in the heat sector, which she said had changed the calculation of tariffs and fuel purchase procedures, etc., since the start of the group's operations in Lithuania,

Vilniaus Energija's 15-year lease on Vilnius' district heating grid expires next year. It has until April 2017 to transfer the assets back to the municipal company Vilniaus Silumos Tinklai (Vilnius Heating Grid, or VST).

Litesko operates the district heating systems of eight Lithuanian towns under lease agreements, some of which are for 20-30 years.

The group has invested around 160 million euros in the capital's heating grid and over 200 million euros in Lithuania in total.