EU-backed investment fund Marguerite is close to purchasing a 47.2% stake in gas monopolist Latvijas Gaze from E.ON, an official in Riga claimed on December 22.
Latvian Economy Minister Dana Reizniece-Ozola said the deal will be announced in the near future, according to Reuters, but declined to reveal details. Should the deal - which has been on the cards since Riga said early in the year it could not afford to buy the stake - go through, it could be taken as a signal of Riga’s determination to execute the unbundling of LG by the current scheduled date of 2017.
Splitting the Russian controlled mononpolist up is required by EU regulations, Brussels finally insisted last month, as Riga fights opposition from Latvia's powerful gas lobby. Reizniece-Ozola has been front and centre of the struggle to force the changes through.
The purchase of close to half of LG, albeit still a minority stake, by a fund controlled by the EIB and state institutions from the likes of Germany, Poland, Spain and France seems unlikely without some understanding that Moscow's grip on the company and the Latvian gas market will be loosened soon. The fund's closeness to Brussels also suggests it would push hard for LG to observe EU energy regulations. Marguerite's mandate is "to help realise investments in projects implementing key EU policies in the areas of climate change, energy security, and trans-European networks".
Local energy analysts noted this year to bne IntelliNews that Gazprom is keen to rally its local forces to try to derail the unbundling, which would mark the end of Gazprom’s dominance in the Baltic region. Following the unbundling, Latvia would join its neighbours Lithuania and Estonia, which already succeeded in wrestling control of their gas transmission networks from Moscow.
Should it offload its stake in LG to Marguerite, E.ON previously partnered Gazprom in control of the gas markets across the Baltic region, would have retreated entirely.
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