All agreed loans

Iceland. Akureyri Municipality

Date of agreement: 16 Apr 2007
Country: Iceland
Customer: Akureyri Municipality
Amount in EUR: EUR 9 million
NACE sector / loan type: Electricity, gas, steam and hot water supply
Business area: Energy and water


The loan totalling EUR 9 million will be used for onlending to Akureyri's energy company Norðurorka to finance three projects in geothermal district heating and power distribution in the Eyjafjörður area. The first project, Reykjaveita, provides for building a new district heating system to supply hot water to two smaller municipalities. The second project is a new drill hole to supply Akureyri with hot water. The third project is the extension of the distribution network of electricity and water to Akureyri's new residential and commercial areas. Akureyri is the biggest municipality in Iceland outside of the capital area with approximately 20,000 inhabitants. Akureyri has developed into an educational and cultural centre for the non-capital area. The loan will be utilised to finance projects that meet NIB's eligibility criteria under the competitiveness and environmental mandates.

Sustainability summary

The geothermal expansion projects of Akureyri municipality will have a positive environmental impact. The new district heating possibilities will replace the use of direct electricity heating and the firing of oil-fuelled boilers. The investments help to improve the energy infrastructure in Iceland by utilising renewable local energy resources. It can be estimated that the decrease in the use of fossil fuel and the usage of district heating as the source of heating instead of direct electricity will reduce the emissions of CO2. A 50 % share of the project qualifies as an environmental investment.