Iceland. Orkuveita Reykjavíkur
|Date of agreement:||26 Nov 2020|
|Amount in USD:||USD 80 million|
|Amount in EUR:||EUR 67.52 million|
|NACE sector / loan type:||Electricity, gas, steam and hot water supply|
Financing from NIB Environmental Bond proceeds
NEB-eligible share: 65%
NEB category: Renewable energy generation
Amount disbursed: EUR 30 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 has provided the loan to finance an investment programme to improve geothermal power production and electricity distribution networks in Iceland. The investment programme has a total value of approximately USD 164 million (ISK 22.7 billion), and runs from 2020 until end of 2025.
The geothermal projects (USD 106 million in total) include new make-up and reinjection wells, new steam pipeline connections, a new workshop building as well as an expansion of the thermal station in Hellisheiði geothermal power plant. Drilling of new “make-up” wells is a continuous activity to maintain the capacity of the geothermal power plants.
In the Nesjavellir geothermal power plant, the projects include new make-up wells, a complete control system update and replacement of equipment in the thermal stations.
The investments in the electricity distribution system (USD 58 million in total) consists of strengthening and replacing old equipment in the network, harbour electrification and the installation of smart meters.
Fulfilment of NIB's mandate
The power generation will potentially increase at the Hellisheiði and Nesjavellir power plants, thus increasing production output. Upgrading the management system at the Nesjavellir power plant will decrease operational risk, reduce operational costs and prepare for further automation.
The forthcoming investments include both new geothermal make-up wells and additional re-injection wells for geothermal fluids. The investments also include an additional new steam pipeline from one of the well areas to allow for more capacity from the area.
A strong electric network is a prerequisite for economic growth. The investments will strengthen the security of supply and further increase the company’s customer base, thus potentially increasing the company’s productivity. Roll-out of smart meters across the entire network will allow the company to monitor the state of the network and make timely and targeted investment decision in the future.
The electrification of the harbour area will allow for shore to ship electricity and thereby reduce the emissions from ships running on auxiliary diesel power when moored.
There are minimal environmental or social risks connected to the installations.