Chinese Company Involved Projects in Lithuania that Serve Both to Mitigate and Reinforce Country’s Dependency on Russian Power

On June 2, Energetikos Tinklų Institutas (Power Network Institute, or ETI), a Lithuanian engineering and design/management subsidiary of China’s state-owned North China Power Engineering Co. (NCPE), signed a contract with Lithuanian state grid corporation, Litgrid, to work on the upgrade of the Priekulė 110/10 kV power substation.  The substation is a critical component of Lithuania’s power infrastructure, servicing the central and western parts of the country.  It is also a key component of Lithuania’s ongoing efforts to integrate the country’s and the region’s power sector with Europe, away from its dependency on Russia.

Energetikos Tinklu Institutas (ETI) was acquired by North China Power Engineering in 2013.  As reported by Lithuanian National Radio and Television (a state broadcaster), since the acquisition, NCPE (by way of ETI) has successfully participated in 23 public contracts for strategically significant energy projects in Lithuania.  It was observed by that news outlet that ETI was likely able to evade security-based screenings, despite its foreign ownership, because of its domestic registration in Lithuania.

It is noteworthy that, while being involved in projects to mitigate the region’s strategic dependency on Russia, North China Power Engineering Co also has vested interests in competing projects that have the opposite strategic effect.  Specifically, as pointed out by Lithuanian National Radio and Television, the Chinese firm is involved in interconnection projects in Belarus that will reportedly facilitate the export of power to the Baltic states from the Russian-manufactured Astravyets nuclear power plant (NPP).  

Lithuania has vociferously opposed this nuclear plant for a variety of reasons ranging from its lack of acceptable safety standards to concerns that the NPP will perpetuate Russian influence over the country’s power sector by undercutting its pursuit of alternative sources of power.  NCPE’s work on the Astravyets NPP was funded by a $323 million loan provided by the Export-Import Bank of China.

ETI is expected to complete work on the Priekule substation within  27 months.