Construction, Energy, Good for Business, Industry, Lithuania, Port

Moreover, the country wants to create conditions for ship building and repair companies to expand as their expansion is now prevented by the old quays the port cannot upgrade due to low investment profitability.

Gytis Mazeika, a vice minister of transport, says a way should be found for the development of these activities that are key for the state. "The state needs to acknowledge that these are activities important for the state. This is the main idea of the project," he told.

The Transport Ministry is proposing to the government to reduce the port authority's average annual capital return rate from investment into the use of the port's infrastructure for such companies from 6% to 2%.

Mazeika says the proposed regulation through reduced capital return would not apply to specific companies as it would be applied to specific activities that do not generate return but are important for Lithuania.

"The wish is to ensure that these activities could continue as the existing regulation demands maximum financial return from state enterprises. If certain activities do not generate it, then, logically, such activities should disappear. But we are now taking steps to prevent that disappearance," he said.

Algis Latakas, head of the Kaipeda State Seaport Authority, says the problem was caused by the port development council's decision to order the port authority to find land lots for the assembly of wind turbines or the production of their components.

In his words, there are several potential territories in the port of Klaipeda that can be used for the assembly or production of wind turbines. They include Vakaru Baltijos Laivu Statykla (Western Baltic Shipyard) a subsidiary of Vakaru Laivu Gamykla (Western Shipyard, or VLG) that is part of Estonia’s BLRT Grupp, in the port's southern part on Smelte Peninsula.

"These are fairly large lots, and around 15 ha would be necessary, but they need to meet certain criteria. And the quays need to meet certain requirement, therefore, the port authority needs to invest into them," Latakas told.

In his words, the location for a future production facility will be picked by the winner of the auction for the installation of wind turbines in the Baltic Sea, and then more clarity is expected. "It would unfortunate if that wasn't a Lithuanian company," Latakas said.

The port of Klaipeda received the majority of its revenue from incoming ships. The Transport Ministry says such fees make around 88% of the port's all revenue, and another 12% is received from land lease.

Amendments to several laws have been already put before the Lithuanian parliament and they will allow installing a 700MW wind farm in the Baltic Sea. If they are adopted before Christmas, a wind power auction could be held in 2023.

Lithuania's state-owned energy group Ignitis Grupe (Ignitis Group) has already voiced its plans to invest into the wind farm in the Baltic Sea in cooperation with its strategic partner Engie, a leading European energy company, and EDPR's Ocean Winds.

Lithuania's business group Achemos Grupe (Achema Group) also has plans and wants to build a production facility for wind turbine components in Klaipeda where it own Klasco, a stevedoring company.

Danish renewable energy company Orsted is also interested in the future auction.