OREANDA-NEWS. April 1, 2010. On 10 March, Latvenergo AS and the European Bank for Reconstruction and Development (EBRD) signed a loan agreement regarding reconstruction of Riga Second Thermal Power Plant’s (TEC-2) second power unit. The Agreement provides a loan of EUR 150 million to Latvenergo AS enabling the company to start the reconstruction of the second TEC-2 power unit within the next few months.

To ensure that reconstruction begins on 3 March, a contract was signed with the winner of the tender – the Turkish company GAMA GUC Sistemleri Muhendislik ve Taahhut A.S. Similarly, technical surveillance will be entrusted to the Swiss company, AF Colenco LTd. To finance this project, a prior loan agreement for EUR 100 million was signed with EIB in October 2009.

Peter Reiniger, Managing Director, Central and South Eastern Europe, stated: “The EBRD finds it gratifying to ensure financing for the implementation of this vitally important project, especially at a time when the situation in the financial market is complicated for attracting financing. Updating Latvenergo AS generating facilities will enable the company to increase the competitiveness of its generating capacities and will considerably improve the infrastructure of the Latvian power industry.”

Karlis Mikelsons, Chairman of the Management Board of Latvenergo AS, said: “It is important for us to be efficient, modern, competitive and at the same time not forgetting about environmental issues – we’ll enjoy all these advantages as soon as the reconstruction of Riga TEC-2 is finished which will be possible due to this loan. The quality of our energy portfolio may be envied by many competitors and many institutions, creditors including, can feel proud to be our partners.”

The procedure of shortlisting the applicants for completing the TEC-2 reconstruction or the construction of the second power unit started in 2008, and on 26 February 2009 out of the two submitted bids, the tender commission deemed the bid of the Turkish company GAMA GUC Sistemleri Muhendislik ve Taahhut A.S to be economically most viable. Work on the plant reconstruction began in 2004.

In the present economic situation, a project on a scale such as that of the TEC-2 reconstruction provides opportunities for Latvian construction companies to be involved in the construction works that very likely will also mean jobs for Latvian specialists. The modernization of TEC-2 is due to completed in 2013.