Energy, Financial Services, Interview, Investments, Lithuania, Nuclear power plant

Rimantas Rudzkis.

The DnB NORD bank's chief analyst Rudzkis, who had voiced his skepticism about the construction of the Visaginas AE time and again, told the news agency ELTA that it would be too risky for Lithuania to erect a power plant of such a capacity. He also said that returning to the initial phase of negotiations for a strategic investor gave a great opportunity to defer this project for several years and carry out a detailed analysis during that time. "The South Korean company's decision to withdraw its bid was much unexpected to me. On the contrary, I hoped that the Korean company would formulate a good proposal. I thought they wanted to penetrate the European Union market, and this would have been their first serious project. It was a surprise, but I am not worried about that as I believe that it is too risky for Lithuania to build a plant now," said Rudzkis.

The economist said that the Energy Ministry's plans to complete the construction of the power plant by 2020 were overly optimistic, and the country's finances were too limited to take on the project. According to Rudzkis, Lithuania would only win by stopping the construction of the power plant and carrying out a detailed analysis on its necessity, writes LETA/ELTA.

"Although Lithuania would have to contribute to the construction only by covering some third or quarter of the total cost, it would still amount to some 4-5 billion litas. Is this a small charge for our budget? This contribution should be made in 2013-2014, when Lithuania will still be living through the hard times. Then the country will have to tighten its belt to reduce the budget deficit to 3% of GDP, now we have 8%. There we would need to throw away billions of litas. How should we do it? We can not cut social benefits anymore as we are among the poorest in the EU, and the AE will require very substantial financial resources," the financial analyst said.

Prof Rudzkis argues that Lithuania does not need the AE not only because of the financial issues, but also because of the fact that there should not be high electricity demand in 2020 in the country, especially because the neighbouring countries are already implementing ambitious nuclear power plant projects.

"We have every opportunity to purchase it from the neighbouring countries and to have cheap electricity without any nuclear power plant in Lithuania. So, why should we take the risk and build such an expensive facility, when we are not sure where to put the electricity produced? I would say let's build the power plant if we clearly see that we will not manage without it. Now we clearly see that we will survive without it," said Rudzkis.