Lithuania’s minister for economics and innovation, Lukas Savickas, has announced that the government will provide no more than EUR 54 million in state aid to Orlen Lithuania, which is part of the Polish energy group Orlen. The parent company has launched a EUR 1 billion project to upgrade its refinery at Mazeikai in Lithuania.
“We are not talking about an annual amount of support,” Savickas told reporters on Wednesday. “This is a specific commitment that has been stated in a letter of intent which stipulates that this is a general state incentive of a little more than 8% of the project’s value. No more than EUR 54 million.”
Earlier in the day, Savickas joined Lithuania’s energy minister, finance minister and environment minister, as well as the CEO of Orlen Lithuania, Zbigniew Paszkowicz, in signing a letter of intent on state aid for Orlen Lithuania, which might include corporate tax relief, compensation for indirect emission permit costs, or investments in infrastructure.
Savickas expressed the hope that the agreement would be a sufficient basis to “expect the fastest possible timeframes” for completion of the project, but he added that Orlen Lithuania has not committed toward an upgrade of the refinery within a specific period of time.
“I think that today’s agreement gives us every reason to expect that the company will definitely move forward as quickly as possible from today,” Savickas said.
CEO: Project delayed by pandemic, war in Ukraine
The Orlen Lietuva CEO reconfirmed his company’s plans to complete the upgrades next year despite “turbulent times” in the region. Paszkowicz added that the project was already postponed once because of a “complete change” in the market situation including a disruption in supply chains,
“The initial plan was to finish the project this year, but we had to take the turbulent times and our environment into consideration,” the CEO told reporters. “We are examining the situation so as to adjust the parameters of the project to make sure that it is implemented reasonably despite the changes in the environment.”
Paszkowicz went on to say that his company’s long-term investments in the refinery upgrade will amount to around EUR 1 billion, adding that the sum has gone up because of the Covid pandemic, inflation, and the war in Ukraine.
The Lithuanian government on Wednesday declared the Mazeikai upgrade project to be of strategic importance, so state aid will amount to 8.5% of the initial cost of EUR 640 million.
Source: BNS
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