The hydro power plant Krångede at Indalsälven, Sweden. Photo: Fortum

15 Dec 2020

NIB lends to Fortum’s hydropower upgrades, bio-heating and bio product R&D

NIB has signed a ten-year loan agreement of EUR 80 million with Fortum Oyj to finance the upgrade of four hydropower plants in Finland and Sweden, construct a new heating plant in Finland, and to finance the ExpandFibre R&D programme in circular bioenergy.

The investment programme includes the hydropower plants Mörsil and Krångede in Sweden and Utanen in Finland. The plants were built during the years 1936-1957, and the aim is to expand their life span and improve safety. The refurbishments include the renewal of turbines as well as the electrical systems. In Krångede, the investments will increase the plant safety by building a new access tunnel and a new unit closure system. Fortum also plans to refurbish an additional hydro power plant in Finland during 2021-2025.

The project contributes to the security of supply and maintaining the efficient operation of electricity markets in NIB’s member countries. Hydropower is, in general, a sustainable way of generating renewable electricity. The project will increase the power generation volume by approximately 20 GWh annually.

The loan from NIB will co-finance the R&D project ExpandFibre, a EUR 50 million investment into a 4-year joint programme with Metsä Group, where Fortum’s share is ca EUR 32 million. The aim is to accelerate the development of technologies that upgrade renewable and sustainable straw and northern wood pulp based fibres, hemicellulose and lignin into new sustainable textile fibres and other biomaterials.

Generally, R&D is one of the main drivers of productivity growth, and the impacts of R&D on productivity are widely distributed, because of the knowledge and skills transfer between companies in the labour markets.

The NIB loan will also finance Fortum’s EUR 40 million investment in the Kivenlahti heating plant in Espoo, Finland, which started operations in May 2020. The investment replaced a coal-fired heat generation unit with a biomass-fueled unit. The project replaces coal-fired district heat generation in Espoo, and is part of Fortum’s plan to phase-out the use of coal in district heating in Espoo by the end of 2025. The city of Espoo aims to become carbon neutral by 2030, and the investment supports this goal. District heating accounts for over 50% of the city’s CO2 emissions.

Fortum is a European energy company with activities in more than 40 countries. The company provides its customers with electricity, gas, heating and cooling as well as smart solutions to improve resource efficiency. Fortum wants to engage its customers and society to join the change for a cleaner world. Together with its subsidiary Uniper, Fortum is the third largest producer of CO2-free electricity in Europe. Fortum’s share is listed on Nasdaq Helsinki and Uniper’s share on the Frankfurt Stock Exchange.

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 Kari Jaukkuri, Senior Client Executive, at +358 10 618 0237,

Mr Arild Moen, Senior Communications Officer, at +358 10 618 0496,

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11 Dec 2020

Fortum Corporation

EUR 80 million