Brussels, 15/02/2008 (Agence Europe) - On Thursday 14 February 2008, the European Commission concluded that the grant of €170 million to support the construction of a 400 MW gas-fired power plant in Lithuania does not constitute state aid. The grant will be paid directly to the construction company from the IIDSF (Ignalina International Decommissioning Support Fund), which is independent of the Lithuanian state.
IIDSF was set up to gather contributions from international donors to help Lithuania decommission the Ignalina power plant and to create new electricity generation facilities in order to offset the consequences of this closure. In line with the conditions for Lithuania's accession to the EU, Unit 1 of the Ignalina power plant was closed in 2005 and Unit 2 is due to close in 2009.
The IIDSF is managed by the European Bank for Reconstruction and Development (EBRD) which will submit project applications to the IIDSF management committee and implement the decisions. Most of the IIDSF resources (100% in recent years) come from the EU's budget. The Commission does not consider it as state aid because the decision to approve the grant was approved by the EBRD and the money will not transit through Lithuania's state coffers. The IIDSF will therefore provide 70% of the funding to build a new 400 MW gas cogeneration plant at an existing electricity power station managed by state-run AB Lietuvos Elektrine, which will provide the remaining 30%. (C.D.)