Norway. Nordkraft AS
|Date of agreement:||24 Jun 2022|
|Amount in NOK:||NOK 500 million|
|Amount in EUR:||EUR 48.61 million|
|NACE sector / loan type:||Production and distribution of electricity|
Financing from NIB Environmental Bond proceeds
NEB-eligible share: 23%
NEB category: Renewable energy generation
Amount disbursed: EUR 10.9 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
Arctic Financing Facility (read more): 100%
NIB provides the loan to co-finance Nordkraft’s 2021-2025 investment programme to construct four small-scale run-of-the river hydropower plants and its regional grid and distribution networks.
The hydropower project involves the construction of four small-scale (<10 MW) run-of-river hydropower plants, with a total annual power generation of 68.7 GWh renewable energy and an installed capacity of 26.1 MW.
Nordkraft’s regional grid investments will increase the transmission capacity of the distribution network in the eight municipalities of Harstad, Narvik, Kvæfjord, Ibestad, Lødingen, Gratangen, Tjeldsund and Evenes in northern Norway.
NIB’s loan of NOK 500 million will finance 42% of the total project amount 1.2 billion, of which the investment in hydropower is NOK 320 million and grid investments is NOK 866 million.
The loan project related to hydropower investment is eligible to be funded by NIB Environmental Bond proceeds.
Nordkraft AS is a utility company based in Narvik in northern Norway, mainly producing electricity, operating hydropower, and wind power assets, and providing electricity distribution and fibre broadband. In 2021, Nordkraft AS and Hålogaland Kraft AS merged their businesses.
Fulfilment of NIB's mandate
Small scale hydropower
The investments are expected to increase baseload production capacity. All four plants make use of the natural fall of the water bodies and none of them have significant regulation capacity, making them run-of-river plants. Øvre Russvik and Ritaelva do not have any artificial reservoirs, while Nedre Russvik and Sveingård can hold back some water in existing lakes.
All four plants fulfil the technical screening criteria for hydropower in the EU taxonomy.
Nordkraft’s regional grid investments are needed to support the increased capacity demand due to the general electrification of society, which is estimated to almost double until 2039. The investments will for example enable the electrification of ferries, construction of charging stations for heavier machinery and a allow a higher degree of electrification of the Evenes Harstad/Narvik airport.
No significant concerns have been identified