The Sale of the Minority Interest in the Power Plants Reduces Economic and Social Risks
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Adviser to the Minister of Economic Affairs
The present article explores the reasons, prerequisites, conditions and the expected results of the sale of minority interest in the Narva Power Plants PLC.
The sale of the minority interest in the Narva Power Plants PLC will create preconditions for achieving the strategic goals set by the long-term national development plan for fuel and energy management in Estonia. The goals are as follows: to guarantee sufficient and stable supply of fuel and energy with the required quality and at optimum prices; to guarantee fulfilling of international environmental requirements and raising the efficiency of oil shale based energy production simultaneously with reducing the harmful effects to the environment by introducing new combustion technologies.
To make necessary investments for achieving these goals, the state has decided to involve a foreign investor. Involving of an investor and restructuring of the whole oil shale based energy production is based on concrete fundamental points that were described by an expert committee already in 1998.
In order to identify the potential strategic investors who would most correspond to the Estonian national interests, the Government together with the adviser J. Henry Schroder & Co. Limited and various experts of the field analysed 40 well-known energy enterprises worldwide that would be qualified to become a strategic investor in the restructuring of the Estonian and Baltic Power Plants. The joint conclusion was that NRG Generating International B.V. with the support of its parent companies NRG Energy Inc. and Northern States Power Company is one of the few realistic choices for serious potential investors who would be acceptable also from the financial, economic and security policy aspects, who have a serious interest in the Baltic region and who would guarantee the implementation of the national goals in connection with the restructuring of the oil shale based energy production and would consequently help to reduce social risks in Ida-Virumaa.
Supply security, non-dependence on the import of electric energy and involving of a strategic investor will help to make these goals a reality. We usually feel the value of security only when it is lacking. The author stresses that the Government may not allow insecurity in the field that affects the whole Estonian economy.
Maria Alajõe, born 1969, MA in economics, Tallinn Technical University 1996, since 1997 Institute of Law, law. Work: 1993-98 chief specialist of the business development department of the Ministry of Economic Affairs, 1996-98 project manager of Pärnu County Business Development Centre; 1998-99 project manager of the Estonian Foreign Investments Agency, May 1999- adviser to the Minister of Economic Affairs. Affiliation:People’s Party – Moderate.