Norway. Nordkraft AS

Date of agreement:24 Jun 2022
Customer:Nordkraft AS
Amount in NOK:NOK 500 million
Amount in EUR:EUR 48.61 million
Maturity:7 years
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.

Electricity distribution
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.

Sustainability summary

No significant concerns have been identified

Press release

NIB finances construction of hydropower plants and networks in Norway

Press release

NIB finansierer oppgradering av vannkraftverk og nettanlegg i Nord-Norge