The shareholders of Litgrid were being summoned to an extraordinary meeting on May 25 to approve an agreement with PSE setting out the terms and conditions for the implementation of the interconnection project, the company said through the Nasdaq Vilnius Stock Exchange.
Pursuant to the draft contract, Litgrid will be responsible for conducting the procurement procedure for a contractor to install the required HVDC cable whereas PSE will be responsible for conducting the procurement procedures for HVDC converter stations in Lithuania and Poland. Both companies will select contractors, sign contracts and implement these tasks.
The project will be funded by the Connecting Europe Facility (CEF) and the transmission system operators’ own or borrowed funds (under the principle of 50/50). PSE will act as the coordinating party for the CEF financial aid.
Final investment decisions will be made by Litgrid and PSE by May 31, 2021.
Litgrid will cover 100 percent of the costs pertaining to the construction of the HVDC converter station in Lithuania as well as the costs related to the construction of the onshore part of the HVDC cable within the country’s territory. PSE will cover identical costs in Poland.
The costs pertaining to the construction of the entire offshore part of the HVDC cable will be shared in equal parts.
Litgrid will own the HVDC converter station in Lithuania and 50 percent of the HVDC cable, whereas PSE will own the HVDC converter station in Poland and the remaining 50 percent of the HVDC cable.
The agreement will be governed by law of the Republic of Poland and disputes between the parties will be finally settled in arbitration before the Stockholm Chamber of Commerce.
The Lithuanian government said in February that it had initiated planning procedures for the Harmony Link construction, adding that the submarine cable's route study had already completed and preparations were underway for a seabed survey.
The HVDC cable of up to 700 MW should be laid in 2021-2025.
The funding application for the project's second stage will be submitted to the European Union in spring. The Harmony Line and related infrastructure will account for the biggest part of investment in the power grid synchronization project. The whole project is estimated to cost approximately 1.6 billion euros.
