2 Jul 2013
NIB allocates additional EUR 10 million for Estlink-2
NIB has signed a 20-year maturity loan agreement of EUR 10 million with Estonian state-owned transmission system operator Elering AS for the construction of Estlink-2, a new high-voltage power connection being built across the Gulf of Finland between the Baltic countries and the Nordic region.
The new loan will reduce Elering’s own funding needs and comes in addition to a EUR 25 million loan signed with Elering for the same project in 2010.
Construction of the new 650 MW link is progressing according to plans and is expected to enter into operation in 2014. The capacity of the interconnection between Estonia and Finland will increase up to 1,000 MW and is estimated to cover more than two thirds of the annual average electricity consumption in Estonia.
The increase of the transmission capacity is one of the preconditions of the integration of the future power market between the Baltic countries and Nord Pool Spot. In 2005, NIB co-financed the construction of Estlink-1, the first ever connection between the Baltic countries and the EU.
“Estlink-2 will provide Estonia with improved access to the Nordic Elspot market and potentially help to reduce the Baltic countries reliance on shale oil-fired power plants,” says Henrik Normann, NIB President and CEO.
The new electricity interconnection is being built between the substation in Püssi in north-eastern Estonia and Anttila in southern Finland. Of the entire 170-kilometre length of the link, 145 kilometres has been laid as a submarine cable on the sea bed.
The total budget of the Estlink-2 project is about EUR 325 million. NIB has earlier lent EUR 40 million to the Finnish national electricity transmission system operator Fingrid Oy for the project. The new loan to Elering will increase NIB’s share to EUR 75 million, representing 23% of the total Estlink-2 project costs. Besides the NIB loans, the Estlink-2 project is financed by the EU, Fingrid, and the European Investment Bank.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
For further information, please contact:
Mr Jarno Virtanen, Senior Manager, Transaction and Portfolio Management, at +358 10 618 0435
Mr Dan-Roald Steinnes, Communications Unit, at +358 10 618 0399