Landsnet hf.
| Date: | 12.9.2025 |
|---|---|
| Country: | Iceland |
| Customer: | Landsnet hf. |
| Amount in USD: | USD 35 million |
| Amount in EUR: | EUR 29.5 million |
| Maturity: | 15 years |
| Business sector: | Public Sector & Utilities |
Project
Project:
NIB is providing a USD 35 million loan to Landsnet hf., Iceland’s transmission system operator, to help finance upgrades to the national grid. The investment programme includes new underground and submarine cables as well as substations, with the projects expected to be energized between 2025 and 2026.
The NIB loan will finance three projects aimed at strengthening Iceland’s electricity network. Together, they will enhance security of supply, reduce transmission losses, and support the country’s growing energy demand as it advances its energy transition.
The financed sub-projects include:
- Northern Iceland: Landsnet is building a 42-kilometre, 66 kV underground cable between Akureyri and Dalvík.
- Southern Iceland: A 36-kilometre, 132 kV underground cable is being installed between Hella and Rimakot.
- Westman Islands connection: The link is being reinforced with two new 66 kV submarine cables, spanning around 18 kilometres in total, including 13 kilometres laid under the sea.
Fulfilment of NIB's mandate
Productivity:
The investments in new substations, underground and subsea cables will strengthen reliability and capacity in three areas with currently weak connections. They will reduce energy losses, improve security of supply, and support Landsnet’s goal of achieving better transmission security—by ensuring the grid can continue operating even if one key component, such as a line or transformer, fails.
Environment:
The investment programme upgrades Iceland’s energy grid, where electricity generation had an average carbon intensity of just 0.63 gCO₂e/kWh in 2023. The project is fully NIB Environmental Bond (NEB)-eligible, meaning it can be financed with NEB proceeds.
Sustainability summary
The programme strengthens grid capacity and resilience while ensuring dual connections at delivery points. Environmental reviews found no significant negative impacts, with all necessary permits obtained for sensitive areas.
In 2023, Iceland’s electricity generation averaged 0.63 gCO₂e/kWh, far below the EU taxonomy threshold of 100 gCO₂e/kWh for sustainable power. As such, the project is considered Sustainable Classification (SC) aligned, with the Do No Significant Harm (DNSH) criteria met through company practices.
