Norway. Agder Energi AS

Date of agreement:11 Dec 2020
Customer:Agder Energi AS
Amount in NOK:NOK 600 million
Amount in EUR:EUR 56.1 million
Maturity:10 years
NACE sector / loan type:Production and distribution of electricity

Financing from NIB Environmental Bond proceeds

NEB-eligible share: 43%

NEB category: Renewable energy generation

Amount disbursed: EUR 24.4 million

Note: For loans in other currencies than EUR, the equivalent in EUR is based on the exchange rate effective for the disbursement. Read more about the NIB Environmental Bonds


NIB provides the loan to co-finance Agder Energy’s investments in new hydroelectric power generators at Fennefoss in the Otra river, and to replace three switching stations as part of upgrading the regional distribution network in southern Norway.

The new Fennefoss hydroelectric power station will have an annual capacity of 9.9 MV and an estimated annual production of 72 GWh, representing 14 % of what Agder Energy already produces in the Otra. The Otra river is a 245-kilometre long river system starting north east of Stavanger and Lysebotn 2, and flowing into the sea at Kristiansand in the south. The river system contains ten hydropower plants.

In addition, Agder Energy will replace three switching stations, contributing to securing the utility’s ongoing production and to somewhat increasing the production potential.

  • The Laudal switching station requires an upgrade to secure the production of 146 GWh in the Mandalsvassdraget.
  • Finså power station in the municipality of Sirdal requires an upgrade to secure the production of 154 GWh and increase a production potential of around 4-5 GWh.
  • The upgrading of Högefoss will secure the production of 154 GWh and increase a production potential of around 5.9 GWh.

Agder Energi AS is the fourth largest producer and distributor of electricity in Norway and the third largest electricity supplier. The company’s activities also comprise district heating and sales of electricity-related services. The main part of Agder Energi’s operations are located in the Agder region in southern Norway.

Fulfilment of NIB's mandate


The investments are expected to increase the production capacity, maintain the security of supply, and contribute to a more efficient use of hydropower resources. However, since the water storage capacity is marginal, the project is unlikely to enhance the market efficiency in the same way as a similar increase in production from larger hydro units with larger reservoirs.

In addition, there will be investments and the replacement of three switching stations contributing to securing ongoing production (454 GWh) and increasing production potential by around 10 GWh.

Expected productivity impact:

  • Increase of new hydropower production of around 72 GWh/a

The extraction of additional hydropower from an already exploited and regulated river is one of the most sustainable ways to produce renewable electricity. The project is predicted to add 72 GWh of renewable energy annually. Given that the added electricity is exported and replaces power with an EU average carbon footprint, the avoided greenhouse gas emissions associated with the project amount to 30,000 tonnes CO2 per year.

Expected environmental impact (added generation):

  • Fennefoss 72 GWh/y
  • Finså 4.5 GWh/y
  • Høgefoss 5.9 GWh/y
  • Høgefoss reduced losses 2.5 GWh/y


Investment in the increased voltage power system and the upgrading of the substation will contribute to a more reliable grid, increase the security of supply, and enhance the utilisation of the power generation potential in the region.

The investments comprise the upgrading of networks and substations, given the expansion of smaller hydro- and wind power projects, such as an increase of voltage for two power lines of around 15 kilometres from 66 kVh to 132 kVh.

In addition, an upgrade of the Elvegata and Hannevika substations are required to secure the power supply to Kristiansand. Given the increased intermittent energy generation a considerable Nordic surplus is expected over the next two decades, and consequently value can be created by optimising the systems and connections to respond to the changing consumer pattern, increasingly unregulated production and capacity potential.

Expected productivity impact:

  • Increased voltage for two power lines (15 km) from 66 kVh to 132 kVh
  • Upgrade of substations
  • Expansion of hydropower and wind power generation in the region

Sustainability summary


Agder applies adequate procedures for developing hydropower projects which are fully in line with NIB´s Sustainability policy and guidelines.


Press release

NIB lends to hydropower and electricity distribution in Norway

Press release

Den nordiske investeringsbank låner til vannkraft og strømdistribusjon