27 Sep 2023

NIB lends to Varanger Kraft´s hydrogen and power grid projects

NIB has signed a seven-year loan agreement with Norwegian utility company Varanger Kraft to upgrade their hydrogen facility for commercial operations and improve the electricity distribution network in the Varanger region in Norway.

A segment of the NOK 50 million (EUR 4.3 million) loan will co-finance Varanger Kraft´s Berlevåg hydrogen production facility. This facility encompasses a 2.5MW electrolyser, hydrogen compressors, and a storage tank, aiming to produce hydrogen for regional use by late 2024. The potential beneficiaries of this hydrogen output span multiple industries including maritime and terrestrial transport.

While the region has limited grid capacity, it is the location of Varanger Kraft´s Raggovidda wind power project. This wind farm boasts a load factor of approximately 50%, establishing it amongst Europe’s premier land-based wind power plants in efficiency. The hydrogen facility will contribute to grid balancing and make use of the surplus wind energy.

The hydrogen project demands an overall investment of NOK 45.3 million. NIB´s contribution, covering 44% of the loan sum, is entirely eligible for financing through NIB Environmental Bonds.

In a separate project, Varanger Kraft is enhancing its electricity distribution infrastructure on the northern edge of Varangerfjorden. This enhancement involves the replacement of 36 kilometres of ageing lines to strengthen the security of power supply. The budget set aside for this sub-project between 2023 and 2026 stands at NOK 62.1 million.

“This loan agreement with Varanger Kraft shows our commitment to driving innovation and ensuring energy efficiency. By harnessing the potential of renewable energy and improving power infrastructure, Varanger Kraft is laying the foundation for a greener, more resilient tomorrow,” says André Küüsvek, President and CEO of NIB.

NIB is currently co-financing three new high voltage (132 kV) lines, four new substations and the refurbishment of two older substations with a NOK 235 million loan agreement signed in 2021.

Varanger Kraft, established in 1938, is a utility company serving northern Norway. Specialising in the production of renewable energy from hydro and wind sources, it also offers services to grid operators and power plants. Beyond energy production and distribution, Varanger Kraft, whose headquarters are in Vadsø, manages power transmission networks and delivers telecom services. The company is owned by the municipalities of Sør-Varanger, Vadsø, Deanu/Tana, Båtsfjord, Berlevåg, Vardø and Unjarga/Nesseby.

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
Patrik Marckert, Senior Banker, +358 10 618 0266, patrik.marckert@nib.int

Arild Moen, Associate Director, Communications, +358 10 618 0496, arild.moen@nib.int

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26 Sep 2023

Varanger Kraft AS

EUR 4.3 million