NIB Nordic Investment Bank

Loan

Norway. Lyse AS

Date of loan: 11 May 2015
Country: Norway
Customer: Lyse AS
Amount in NOK: NOK 950 million
Amount in EUR: EUR 112.8 million
Maturity: 15 years
NACE sector / loan type: Electricity, gas, steam and hot water supply

Sectors

Energy and environment

Environmental effect

This loan contributes to climate change mitigation: 100%

Financing from NIB Environmental Bond proceeds

Share of financing: 100%

Amount disbursed: EUR 113 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

Project

The loan has been provided to Lyse AS for the construction of a new hydroelectric power plant in an already regulated watercourse at the innermost end of Lysefjord in Forsand municipality, Rogaland, southern Norway.

When commissioned during spring 2018, the new 370 MW Lysebotn 2 hydropower station will replace the existing 210 MW Lysebotn 1 plant. Annual electricity production is then expected to increase by 14% to 1,500 GWh. The old facility, which has been operational since 1953, will be held in reserve until Lysebotn 2 is commissioned.

The production increase is due to a new 50-metre water fall, improved efficiency of turbines and reduced water losses from flooding of the upper lake Lyngsvatn and the lower lake Strandvatn. Whereas the present water intake for Lysebotn 1 is from the lower lake at 635 metres above sea level, the new intake for Lysebotn 2 will be from the upper lake at 687 metres above sea level.

Lyse will drill a 6,200 metre long tunnel directly from the upper Lyngsvatn lake to Strandvatn, and connect both reservoirs to the new hydropower plant. The plant will have two identical Francis turbines, each with a capacity of 185 MW.

Lyse AS is Norway’s sixth largest hydropower producer and a substantial national operator within renewable energy. Its product range includes electricity, natural gas, heat, refrigeration, broadband and other telecommunication services.

Fulfilment of NIB's mandate

The investment will increase the output of the power station by 76% and increase the efficiency of the regional electricity market.

Hydropower allows for large-scale storage and is less susceptible to price variations than other forms of renewable energy. The improved hydraulic capacity of the plant will make rapid dispatch of electricity possible, so that growing demand and fluctuating prices in NIB’s member countries can be met. Hydropower is expected to become even more significant in Northern Europe as the share of intermittent renewable energy capacity in the energy mix increases.

Sustainability summary

Increasing hydropower generation in an already regulated watercourse is an environmentally efficient way of generating electricity. No further redirecting of the river system will be required in order to make full use of the capacities of the new station. Since all major work will be carried out inside the mountain it is located in, only minor environmental impacts are expected. No sensitive or residential areas will be affected.

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