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. Last Updated: 07/27/2016

Estonians Angered by Sale of Power Stations

TALLINN, Estonia -- Controversy has erupted over the sale of Estonia's main energy plants to Americans f with opponents of the deal on Tuesday attempting to turn up the heat on the government and the U.S. investors.

The government last month agreed to sell a 49 percent stake in the two power stations to the Minnesota-based NRG Energy for $55 million and $361 million in investment to revamp the Soviet-built utilities.

The state-owned Estonian Energy would retain a 51 percent share of the installations, which burn oil shale to produce some 95 percent of this former Soviet Baltic republic's electricity.

Negotiators for the government and NRG say they hope they'll be able to sign a final agreement next month; it would also need to be approved by parliament.

But the NRG deal has angered opposition parties and many local business leaders who say the desire to cozy up to the United States for national security reasons has led to the government to accept unfavorable economic terms.

In one of the largest rallies in Estonia in recent years, some 1,500 people denounced the deal outside parliament Tuesday, saying it jeopardized Estonian sovereignty. "The government's sold the state, it's sold us," one placard read.

Opposition deputies also returned from their summer recess to try to force through a special session of the 101-seat Riigikogu parliament to debate the sale, but they fell four seats short of the 51 necessary for a quorum.

Critics have focused on provisions letting NRG raise the price of electricity by some 20 percent over the next few years. Opponents say higher electricity bills will hurt the poor and slash profits of many Estonian firms.

Last week, the opposition launched a campaign against the deal, including advertisements showing a man sitting in a jail-like room under a switched-off light bulb with his hands tied behind his back. "Is this what we wanted?" the ad asks.

But backers say the sale to NRG is the only way to draw desperately needed capital to modernize the rundown stations and to make the plants, which spew tons of sulfur dioxide into the air daily, more environmentally friendly.

Another decisive benefit, they say, is that the deal will enhance Estonian national security by tying Estonia's economic interests with the United States.

Hillar Lauri, NRG's representative in Estonia, said that without the capital the Americans were able to scrape together and invest, the aging plants would continue to deteriorate and could eventually grind to a halt.

Lauri said local investors have neither the experience to carry out the complicated restructuring nor the access to capital the project will require. He also said the price rises envisioned by NRG were moderate and necessary to ensure plants can reinvest profits into repairs put off since Estonia won independence in 1991.