Iceland. Landsnet hf.

Date of agreement:15 May 2024
Customer:Landsnet hf.
Amount in USD:USD 50 million
Amount in EUR:EUR 46.5 million
Maturity:15 years


The investment loan with Iceland’s transmission system operator Landsnet hf. finances the construction of new and upgrades of existing substations, investments in underground cabling and new overhead lines during 2023-2026. The upgrades will particularly enhance the transmission system from North-East to South Iceland and along the country’s west coast, improving capacity and network stability for both the society and industry.

Fulfilment of NIB's mandate

Investments in Iceland’s transmission system from the North-East to South along the west coast will enhance capacity and stability of the network. Hydro power, crucial for local power stability, is influenced by long-term wind patterns affecting reservoir fill rates. With rising consumption primarily in the southern Iceland, imbalances due to higher northern reservoir levels and inadequate transmission could lead to supply shortages in the southern region. New substations and network updates will balance the system and improve supply security. This enhancement supports the economy, reliant on natural resources and tourism. The energy resources have attracted energy-intensive industries to the country.

The investment programme is a part of the larger investment programme aiming at improvements of the Ring system. These investments are needed both to expand and strengthen the grid. The stronger and more reliable grid will enable increased utilisation of renewable energy generation capacities connected to the grid. This supports the climate change mitigation efforts and Landsnet’s own target of carbon neutrality by 2030.

Sustainability summary

No significant concerns have been identified.

Press release

NIB loan strengthens Icelandic electricity grid

Press release

Lán NIB styrkir flutningskerfi raforku á Íslandi