Boston, MA -- (ReleaseWire) -- 03/18/2014 -- There is cautious optimism in the Lithuanian construction sector, bolstered by improvements in the domestic economy and stronger export performance. Although these factors will prove potent enough to help the sector return to positive growth territory in 2013 and 2014, the medium- to long-term outlook will remain less impressive, owing to uncertainties surrounding key transport and energy projects. On the brighter side, its EU membership will attract investors, helping the sector post annual average growth of 3.6% between 2014 and 2023.
The key projects and developments are:
- Port Expansion: The Lithuanian port sector received a boost from the EUR44mn (US$57.2mn) loan agreement signed between the Nordic Investment Bank (NIB) and the Klaipeda State Seaport Authority in March 2013. Funding will be used for the reconstruction of quays, the building of a pier for passenger and cargo ferries, as well as dredging and boarding the port's navigation channel. A EUR28mn (US $37.04mn) contract was signed by a consortium between Lemminkainen and YIT in February 2013, to construct an extension to a container terminal at the Lithuanian Seaport of Klaipeda.
- On PPP Road: Out of the six pilot public-private partnership (PPP) projects, one reached financial close in May 2013, when the Palanga bypass was awarded to Kauno Tiltai and Siauliu Plentas. The partners will design, build, operate and finance the project at a cost of EUR36mn over 25 years. Construction will begin by end-2013 and is due to be completed in Q215.
- Power Link Dispute Settled: The much-delayed Swedlit power link project received all the necessary permits from the Lithuanian authorities in May 2013, which will enable construction to start from early-2014. It was announced in October 2009 that Latvia had agreed for Lithuania to host the cable. The link is now expected to be completed by end-2015, compared with the 2012 deadline previously announced.
- Uncertain Nuclear Future: Lithuania entered into renewed talks with Japanese conglomerate Hitachi, as well as Latvia and Estonia, for the 1,350 megawatt (MW) Visaginas nuclear power plant project. However, we remain sceptical about the realisation of the plant in the medium term, owing to the possibility the country will rely on imported liquefied natural gas (LNG), public antipathy to nuclear power and difficulties in agreeing financing.
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