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"The new Estonian-Latvian power connection is notable because a project important from the viewpoint of energy security and market will be carried out without burdening the wallets of Estonian electricity consumers," said Elering CEO Taavi Veskimagi.

"The European Union will finance a project that costs around 170 mln euros with 112 mln euros and the rest will be covered by Elering from the cross-border capacity auction revenue," Veskimagi added.

The total cost of the third Estonian-Latvian power connection is about 172 mln euros. In 2014 the European Union decided to cofinance the project with 112 mln euros. The connection is necessary for decoupling the Baltic states' electricity systems from the Russian system. The connection will increase transmission capacity used for trade between Estonia and Latvia between 600 megawatts.