OFFICIAL TRANSLATION REPUBLIC OF LITHUANIA Law ON the NUCLEAR POWER PLANT 28 June 2007 No X-1231 (As amended on 1 Februa

OFFICIAL TRANSLATION REPUBLIC OF LITHUANIA Law ON the NUCLEAR POWER PLANT 28 June 2007 No X-1231 (As amended on 1 February 2008 No X-1446) Vilnius PREAMBLE The Seimas of the Republic of Lithuania, implementing the National Energy Strategy and having regard to the energy policy strategy of the European Union; seeking to secure supplies of energy from diverse, secure, sustainable energy sources which do not emit greenhouse gases, and to promote future economic growth; seeking to protect the vital interests and national security of the Republic of Lithuania; emphasising the importance of implementing the principles of European and transatlantic integration when developing energy sectors of Lithuania and ensuring the country’s energy security; considering the experience accumulated through secure and reliable operation of the Ignalina Nuclear Power Plant for many years; evaluating the initiative of private legal entities which may form a basis for preparing, developing and implementing a regional nuclear power plant project in Lithuania; aiming at substituting for the electricity generating capacities to be lost as a result of the decommissioning of the Ignalina Nuclear Power Plant and creating legal preconditions for the construction of a new nuclear power plant in Lithuania with the capacity to be established in the light of the results of environmental impact assessment and investors’ agreements; taking into account the favourable economic environment for the construction of a nuclear power plant; taking into consideration nuclear safety requirements and Lithuania’s obligations under international treaties, passes this Law on the Nuclear Power Plant. CHAPTER ONE GENERAL PROVISIONS Article

1. Purpose and Objective of the Law The purpose and objective of this Law shall be to lay down provisions and to create legal, financial and organisational preconditions for the implementation of a new nuclear power plant project. Article
2. Decision on a New Nuclear Power Plant The Seimas shall give its approval for the construction of a new nuclear power plant in the Republic of Lithuania. Article
3. Definitions for the Purposes of this Law Nuclear power plant shall mean a complex of equipment and buildings intended for generating electricity or electricity and heat by using nuclear fuel. Investors shall mean the national investor and strategic partners. National investor shall mean the private legal entity referred to in Chapter Four of this Law. Project shall mean a new nuclear power plant project being developed and implemented, involving the preparation of a feasibility study on a new nuclear power plant, as well as its design, construction, financing, operation, decommissioning and radioactive waste management. Project implementing company shall mean a private legal entity established for implementing the project. Reserve capacity shall mean the potential of electricity capacity and power generation necessary for regulating frequency and power flows and generating electricity in cases of unexpected decrease in generation or increase in consumption. Strategic partners shall mean legal entities that satisfy the criteria laid down in paragraph 2 of Article 6 and have entered into agreements with the national investor on participation in the project. Article
4. Establishment of Special Security Measures
5. Special security measures for ensuring the national security interests (hereinafter referred to as special security measures) in respect of the project shall be established by laws and other legal acts.
6. The Government of the Republic of Lithuania shall establish the procedure for implementing special security measures. CHAPTER TWO IMPLEMENTATION OF THE PROJECT Article
7. Project Implementing Company
8. A project implementing company shall be established, registered and operated in accordance with the procedure laid down by laws of the Republic of Lithuania. Its registered office shall be situated in the Republic of Lithuania.
9. The project implementing company shall be responsible for carrying out project implementation activities in compliance with the safety requirements imposed on nuclear activities. Having fulfilled the requirements laid down in legal acts and having received authorisations and licences, the project implementing company shall become the operator of the nuclear power plant and expand electricity generating capacities in accordance with the procedure laid down by legal acts.
10. The project implementing company and the new nuclear power plant shall have particular strategic importance to the national security of Lithuania and its vital national interests.
11. The project implementing company shall be subject to the special security measures established by laws and other legal acts of the Republic of Lithuania. Article
12. Participants in the Project Implementing Company
13. The project implementing company may be established on the initiative of the national investor, with the opportunity being provided for strategic partners to participate in it.
14. Investors shall be entities satisfying the following criteria: 1) complying with the special security measures established by laws and other legal acts; 2) having financial, legal and technical capabilities to discharge all their obligations during the period of the design, construction, operation and final decommissioning of the nuclear power plant; 3) having their liability secured by guarantees and obligations the conditions whereof are acceptable to the Government of the Republic of Lithuania; 4) undertaking obligations, by concluding respective agreements with the Lithuanian transmission system operator, to provide reserve capacity acceptable to the Lithuanian electricity transmission system operator and enabling the latter to guarantee the stability and security of electricity transmission, or undertaking obligations to cover the costs of reserve capacity.
15. Investors shall participate in the implementation of the project on equal terms: their contribution, rights and obligations in implementing the project must be proportionate to the future participation of each investor in the capital of the project implementing company. The stakes of investors in the capital of the project implementing company shall be established by mutual agreements, subject to the requirements laid down in this Law.
16. Each investor shall finance or ensure financing of that portion of the project costs (including costs associated with the project implementation, the operation of the project implementing company, the decommissioning of the nuclear power plant and radioactive waste management) which is proportionate to its stake in the capital of the project implementing company.
17. The rights and duties of the national investor in the management of the project implementing company shall be established by taking into account the vital national interests.
18. The state control and supervision of compliance with the criteria laid down in paragraph 2 of this Article shall be ensured through the licensing of the activities of the future operator of the nuclear power plant. Article
19. Procurement of Goods, Services and Works Required for the Implementation of the Project The procurement of goods, services and works required for the implementation of the project shall be carried out in accordance with the procedure laid down by laws and other legal acts, subject to the national security criteria, vital national interests and special security measures established by the Republic of Lithuania. CHAPTER THREE MANAGEMENT Article
20. Management
21. The rights attached to the shares owned by the State in the national investor company shall be exercised in accordance with the procedure established by the Government of the Republic of Lithuania. The manager of the State-owned shares or persons authorised by the manager shall exercise the property and non-property rights of the State as a shareholder in the national investor company in accordance with the said procedure. The manager of the State-owned shares or persons authorised by the manager may vote in the bodies of the national investor company on the agreement of shareholders in the project implementing company only pursuant to resolutions of the Government of the Republic of Lithuania, with the approval of the Seimas of the Republic of Lithuania to the material terms and conditions of this agreement.
22. The national investor shall own a block of at least 34 percent of shares in the project implementing company carrying at least 34 percent of votes at the general shareholders’ meeting of the project implementing company.
23. The Government of the Republic of Lithuania and the national investor, managing the main part of the Lithuanian power system through its subsidiaries, shall implement the strategic goal of Lithuania, namely, integrate in a complex manner the power system of the Republic of Lithuania into the power transmission systems of the states of the European Union and internal power markets.
24. Implementing the strategic goal provided for in paragraph 3 of this Article, the Government of the Republic of Lithuania and the state institutions, taking resolutions and decisions and concluding agreements, as well as the managers of state shares, taking decisions, concluding agreements and exercising the rights of shareholders in the company of the national investor or successor to its rights, owned by the State, also in the subsidiaries established by these companies, shall ensure that: 1) in seeking to attain the goal of its activity (gaining benefits for itself and all its shareholders in a socially responsible manner), the national investor would effectively implement the principal task of the power system of the Republic of Lithuania – to provide Lithuanian consumers with power for an unlimited period of time in an independent, safe and reliable manner; 2) the activity of the national investor and its subsidiaries would be organised in such a manner that it would comply with the requirements of legal acts of the Republic of Lithuania and the European Union and the best business practice of electricity companies of the European Union member states; 3) the strategic objects provided for in the National Energy Strategy – the new nuclear power plant, power transmission interconnections to the Republic of Poland and the Kingdom of Sweden, ensuring efficient power exchanges of the required volume between the power system of the Republic of Lithuania and the systems belonging to the Union for the Coordination of Transmission of Electricity (UCTE) as well as to the Organisation for the Nordic System Operators (NORDEL) – would be constructed without delay; 4) technical solutions and parameters of the new nuclear power plant and power transmission interconnections to the Kingdom of Sweden and the Republic of Poland would be chosen so that the majority of the power resources required from the nuclear power plant would be received from the European Union Member States and the conditions for the synchronous operation of the power system of the Republic of Lithuania with the UCTE system would be met; 5) the power system of the Republic of Lithuania would be prepared for prompt interconnection with the UCTE system for synchronous operation as soon as construction of power networks interconnections is completed, the technical measures are implemented and the actions required for Lithuania to join the UCTE are performed; 6) with the Lithuanian and foreign investors participating in the company capital for implementing the project of the new nuclear power plant, the vital interests of national security and the State of the Republic of Lithuania would be protected and, when selecting participants in the implementation of the project of the nuclear power plant, the criteria of the European and Trans-Atlantic integration would be applied. Article
25. Emergency Situation Upon the declaration of a state of emergency in the energy sector in accordance with the provisions of the Law on Energy, in the event or under threat of a nuclear accident, under threat of damage to the environment or in the event of imminent danger to human health or safety, the operator of the nuclear power plant must carry out the instructions issued by the Government of the Republic of Lithuania or institutions authorised by it. Where, in the event of an emergency in the energy sector, in the event or under threat of a nuclear accident, under threat of damage to the environment or in the event of imminent danger to human health or safety, the operator of the nuclear power plant fails to carry out such instructions, the Government of the Republic of Lithuania or an institution authorised by it shall have the right, for the duration of the emergency in the energy sector or until the threat or consequences of the nuclear accident are eliminated, the threat of environmental damage or the danger to human health or safety is averted, to take over the management of the project implementing company, suspend or revoke its licence or take other necessary measures to ensure nuclear safety, radiation protection and the operation of the project implementing company; these measures, however, shall be applied only to the extent necessary to overcome the difficulties encountered. The takeover of the management of the project implementing company, the suspension or revocation of licences shall not exempt the project implementing company from liability. CHAPTER FOUR NATIONAL INVESTOR Article
26. National Investor
27. The national investor shall be an independent private legal entity registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner and taking part in implementing the strategic goal of Lithuania provided for in paragraph 3 of Article 8 of this Law. The legal form of the national investor shall be a public limited liability company; the registered office of the national investor shall be located in the Republic of Lithuania. The national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system - the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden.
28. The Republic of Lithuania shall own a block of more than 1/2 of shares in the national investor carrying more than 1/2 of votes at the general shareholders’ meeting of the national investor. The other part of the authorised capital of the national investor may consist of private national capital and foreign capital meeting the criteria of European and trans-Atlantic integration according to the conditions and procedure established in the Law on Enterprises and Facilities of Strategic Importance to National Security and other Enterprises Important to Ensuring National Security as well as other laws and legal acts of the Republic of Lithuania. 3.The national investor and its subsidiaries shall make a group of companies of the national investor. The major activity of the national investor must be that of the parent company of the group of companies of the national investor. The national investor may also engage in other activities that do not contradict the purpose of activities of the national investor.
29. Companies from the group of companies of the national investor shall carry out the activities of electricity generation, transmission, distribution, supply, market operator and other activities unbundled in accordance with the procedure laid down by legal acts. A company from the group of companies of the national investor may also engage in other activities that do not contradict the purpose of activities of that company.
30. The bodies of the national investor shall be the general shareholders’ meeting, the supervisory board, the board and the manager.
31. Decisions taken by the Government of the Republic of Lithuania or an institution authorised by it concerning the voting at the general shareholders’ meeting of the national investor must create the necessary preconditions for public trading in the shares of the national investor on the regulated market as defined in the Law on Markets in Financial Instruments. This provision shall not bind the Government of the Republic of Lithuania or an institution authorised by it to take any decision on the sale or other transfer of the shares of the national investor.
32. The national investor and the bodies of the national investor must operate so that the national investor would under any circumstances hold at least 2/3 of shares and votes of the public limited liability company “Lietuvos energija”, the public limited liability company Eastern Distribution Networks and the public limited liability company VST at the general meeting of shareholders of each company. Where the activities pursued by the public limited liability company “Lietuvos energija”, the public limited liability company Eastern Distribution Networks and the public limited liability company VST are separated, transferred or conveyed when reorganising, transforming the companies or otherwise, the national investor must, directly or indirectly, hold at least 2/3 of shares and votes at the general meeting of shareholders in the companies holding by the right of ownership the electricity transmission network of the Republic of Lithuania, electricity distribution networks, also in the companies pursuing the activities of electricity transmission, the electricity market operator, electricity distribution and the public electricity supplier.
33. This Law shall not grant the national investor company any exclusive rights with respect to other persons regarding the implementation of power system interconnection projects with the Republic of Poland and the Kingdom of Sweden referred to in this Article. Article
34. Establishment of the National Investor and Increase of the Authorised Capital
35. The Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to: 1) negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor ; 2) participate in establishing the public limited liability company, the authorised capital whereof during the establishment would be built of cash and into the authorised capital whereof all or part of the shares owned by the State in the public limited liability company “Lietuvos energija” and in the public limited liability company “Rytų skirstomieji tinklai” (Eastern Distribution Networks), amounting to more than 2/3 of shares of each company and carrying more than 2/3 of votes at the general shareholders’ meeting, would be invested, and, if the agreements provided for in subparagraph 1 of this paragraph are reached, the shares of the public limited liability company VST amounting to more than 2/3 of shares of the company and carrying more than 2/3 of votes at the general shareholders’ meeting would be invested after the establishment; 3) adopt decisions required for the implementation of provisions of subparagraphs 1 and 2 of this paragraph and conclude respective transactions.
36. Implementing the provisions of paragraph 1of this Article, the shares of the public limited liability company “Lietuvos energija”, the public limited liability company “Rytų skirstomieji tinklai” and the pubic limited liability company VST must be evaluated by an independent property assessor in accordance with the procedure laid down by legal acts, as well as an opinion on the valuation of shares must be received from a financial institution having the long-term borrowing rating not lower than “A-” according to the rating assigned by the international rating agency Fitch Ratings, or “A3” according to the rating assigned by the international rating agency Moody’s, or “A-” according to the rating assigned by the international rating agency Standard & Poor’s. The procurement of services relating to the valuation of shares, the expression of an opinion on the valuation of shares and other expert services shall be carried out by the Government of the Republic of Lithuania or an institution authorised by it in accordance with the procedure laid down by legal acts, using financial resources of the Privatisation Fund for payment.
37. The Government of the Republic of Lithuania shall have the right to take a decision on the sale of the State-owned shares in the national investor to other persons that satisfy the criteria of the European and Trans-Atlantic integration or on the assignment or waiver for the benefit of other persons of the pre-emption right of the State to acquire newly issued shares in the national investor, in all cases ensuring that the Republic of Lithuania shall own a block of more than 1/2 of shares in the national investor carrying more than 1/2 of votes at the general shareholders’ meeting of the national investor.
38. Should the Government of the Republic of Lithuania decide to sell a part of the State-owned shares in the national investor, such sale must be carried out publicly, providing non-discriminatory conditions for the citizens and legal persons of the Republic of Lithuania to acquire them, in all cases ensuring that the Republic of Lithuania shall own a block of more than 1/2 of shares in the national investor carrying more than 1/2 of votes at the general shareholders’ meeting of the national investor. With the view of ensuring wider and adequate representation of the Republic of Lithuania and other shareholders of the national investor in the bodies of the national investor, the number of members of the supervisory board may be higher than specified in the Law on Companies, but not more than
40. The Government of the Republic of Lithuania or an institution authorised by it shall inform the Seimas about the progress and results of negotiations referred to in subparagraph 1 of paragraph 1 of this Article. The agreements provided for in subparagraph 1 of paragraph 1 of this Article shall not be confidential (they shall be public). The Government of the Republic of Lithuania or an institution authorised by it shall publish the text of the agreements referred to in this paragraph on the website of the Government.
41. If the Government of the Republic of Lithuania invests into the authorised capital of the national investor the shares of the public limited liability company “Lietuvos energija” which amount to 2/3 of shares and votes at the general meeting of shareholders of the public limited liability company “Lietuvos energija”, the requirement of Article 3 of the Law on Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises Important for Ensuring National Security leaving the power of decision in the public limited liability company “Lietuvos energija” to the State shall be deemed fulfilled until the State owns more than 1/2 of shares in the national investor carrying more than 1/2 of votes at the general shareholders’ meeting of the national investor. CHAPTER FIVE SITE OF CONSTRUCTION Article
42. Designating the Construction Site The construction site for the nuclear power plant shall be designated in accordance with the procedure laid down by the Law on Territorial Planning, the Law on Environmental Impact Assessment of Planned Economic Activities, the Law on Nuclear Energy, this Law and other legal acts, taking into account the recommendations of the International Atomic Energy Agency. Article
43. Allotment of Land for the Construction of the New Nuclear Power Plant
44. The project shall be an economic project of national significance responding to the public needs.
45. The land needed for the construction of the new nuclear power plant shall, in accordance with the procedure laid down by laws and other legal acts, be transferred, leased or allotted for use on other grounds specified in legal acts to the project implementing company or the national investor.
46. The land required for the implementation of the project may be taken for public needs from private land owners or contracts for the use or lease of State-owned land may be terminated for this purpose before their expiry in accordance with the procedure laid down by the Law on Land and other legal acts. CHAPTER SIX FINAL PROVISIONS Article
47. Decommissioning Fund Resources to guarantee the decommissioning of the new nuclear power plant shall be accumulated in the nuclear power plant decommissioning fund. Such decommissioning fund shall be established by law. Article
48. Financing of Control and Supervisory Authorities The activities of nuclear energy regulatory, control and supervisory authorities shall be financed from the sources specified in laws and other legal acts, as well as from sources of financing provided for in international treaties. Article
49. Protection of Investments Investors shall be ensured the investment protection measures established by the Law on Investments, international treaties and other legal acts. Article
50. Separation of the Ignalina Nuclear Power Plant from the Project
51. The decommissioning works of the State Enterprise Ignalina Nuclear Power Plant shall be carried out separately and independently from the project. The State Enterprise Ignalina Nuclear Power Plant shall not participate in the nuclear power plant project.
52. Without prejudice to the security of the Ignalina Nuclear Power Plant, the infrastructure of the State Enterprise Ignalina Nuclear Power Plant and other assets necessary for implementing the project may be leased or provided on other grounds specified in legal acts to the project implementing company without tendering in accordance with the procedure laid down by laws of the Republic of Lithuania. Article
53. Provision of Information to the Public The project implementing company and the Government of the Republic of Lithuania or an institution authorised by it shall provide regular information to the public regarding the progress of the implementation of the project, the measures ensuring the nuclear power plant safety, and the benefits brought by the nuclear power plant to Lithuania and the entire Baltic region. Article
54. Implementation of the Law When implementing the provisions of Chapter Four of this Law, the provisions of the Law on the Privatisation of State-Owned and Municipal Property shall not apply. Article
55. Proposals to the Government The Government of the Republic of Lithuania shall: 1) approve the procedure for exercising the rights attached to the State-owned shares in the national investor company during the implementation of the project; 2) approve the procedure for implementing special security measures; 3) draft and approve the National Programme for the training of nuclear energy specialists intended to ensure the preparation of necessary nuclear energy specialists, as well as establish measures for the implementation of this programme; 4) draw up and approve other legal acts required for the implementation of the provisions of this Law as well as draft and submit to the Seimas of the Republic of Lithuania draft Laws required for the implementation of this Law. I promulgate this Law passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS