EU approves Lithuanian LNG terminal financing modification

EU approves Lithuanian LNG terminal financing modificationImage courtesy of Klaipedos Nafta

The European Commission has approved, under EU State aid rules, Lithuanian plans to modify the financing mechanism to cover the leasing costs of a liquefied natural gas (LNG) terminal in Klaipėda, Lithuania.

In November 2013, the Commission approved aid to support the construction and operation of the LNG terminal under EU State aid rules.

In particular, the Commission found that the measure was necessary to ensure security of gas supply in Lithuania.

Under the 2013 decision, the leasing costs of the LNG terminal were exclusively financed through a fee levied on Lithuanian gas consumers, the so-called ‘LNG Supplement’.

In order to reduce the financial burden on consumers, Lithuania now intends to replace part of the LNG Supplement with a loan guaranteed by the Lithuanian State.

The State guarantee is necessary to obtain a loan of €135.5 million from a private financial institution. The loan will cover part of the leasing costs of the terminal for the period 2019-2024. The LNG Supplement will be reduced of a correspondent amount.

The Commission found that the measure, as amended, remains compatible with the Internal Market and, therefore, approved the modification of the financing mechanism, under EU State aid rules.

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