State paid €57 million for Conexus shares

Take note – story published 6 years ago

Latvia’s Augstsprieguma Tikls transmission system operator last year paid €57.394 million for a 34.36% stake in Conexus Baltic Grid, the operator of natural gas transmission and storage infrastructure, Augstsprieguma Tikls board chairman Vairs Boks told LETA.

He did not specify how much of the sum was paid to Itera Latvija for 16.05 percent stake, and how much to German energy concern Uniper Ruhrgas International GmbH (Uniper) that held 18.31 percent.

Boks said that Augstsprieguma Tikls got a loan from the Treasury to purchase the shares on Conexus.

"Purchase of Conexus shares will not affect the power transmission tariffs. Augstprieguma Tikls got a loan from the Treasury. This year the state will invest in Augstsprieguma Tikls' share capital at the amount of this sum, and, thus, the loan will be settled. Interest rate will be covered from Conexus dividends," said Boks.

The most important goal for purchase of Conexus shares is development of the regional natural gas market, further integration of the Latvian energy market in the EU, improvement of energy supply security and Latvia’s competitiveness.

As reported, in 2016 the Latvian parliament adopted amendments to the Law on Energy, envisaging the opening of the natural gas market for competition as of April 3, 2017 and reorganization of the vertically integrated natural gas company Latvijas Gaze. The law obliged Latvijas Gaze to establish two legally independent companies, one of them undertaking all activities related to natural gas transmission and storage and the second- distribution and trading activities. Thus in the process of reorganization from early 2017 all assets related with the transmission and storage of the natural gas (transmission networks and the underground gas storage) from Latvijas Gaze were transferred to Conexus Baltic Grid.

The Energy Law of Latvia also envisages that shareholders of the natural gas transmission system and storage operator, which are involved in the natural gas production or trading activities, are obliged to sell their shares in Conexus until December 31, 2017. The aim of this provision is to secure complete independence of the transmission system and storage operator, neutrality towards all market participants and to avoid any risk that shareholders of Conexus Baltic Grid may face conflict on interest.

Conexus Baltic Grid, which will take over natural gas storage and transmission functions from Latvijas Gaze, was established on December 22, 2016. Its largest shareholders are Russian Gazprom (34.1 percent), Marguerite Fund (29.1 percent), Germany's Uniper Ruhrgas International GmbH (18.3 percent) and Itera Latvija (16 percent) or the same as Latvijas Gaze shareholders. But the shareholders, with the exception of financial investor Marguerite Fund, had to dispose of their shares in Conexus Baltic Grid by the end of 2017 so that the new shareholders would not be related to Latvijas Gaze.

On December 15 Augstsprieguma Tikls and the Germany-based energy company Uniper Ruhrgas International GmbH (Uniper) reached an agreement on the purchase of Uniper’s 18.31 percent of shares in Conexus Baltic Grid. On December 27 Augstsprieguma Tikls acquired 16.05 percent of shares in Conexus Baltic Grid from Itera Latvija. Gazprom still owns 34.1 percent in the company, but has lost its voting rights.

Augstsprieguma Tikls is an independent transmission system operator, which operates the electric power transmission network and ensures security of electric power supply in Latvia, as well as fulfills the following mission: providing power transmission services based on the published transmission service tariffs and providing free third-party access to the transmission network. Augstsprieguma Tikls holds operational control of the transmission system and ensures its stable operation.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles


Most important