3 Jul 2020
EUR 60 million
Financial institutions and SMEs
|Date of agreement:||11 Dec 2012|
|Customer:||Kraftnät Åland Ab|
|Amount in EUR:||EUR 60 million|
|NACE sector / loan type:||Electricity, gas, steam and hot water supply|
|Business area:||Energy and water|
The loan has been provided for financing a 160-kilometre subsea cable between the Åland Islands and Finland.
Kraftnät Åland Ab is to build a 100 MW subsea cable connection between Ytterby and Naantali on mainland Finland. Currently 70% of the electricity used in Åland comes via a cable connection from Sweden. The aim of the project is to further secure the energy supply in Åland. As a result of the new cable, two fossil-fuelled reserve power units can be closed down.
Established in 1997, Kraftnät Åland Ab is responsible for the transmission of electric energy in the Åland Islands. It owns and operates some 300 kilometres of transmission line and 18 substations. The company is owned by the Government of Åland.
The new cable will not only secure the electricity supply in Åland, it will also be used as a new route between Finland and Sweden and to help stabilise the Nordic electricity market. The building of the cable will potentially also support wind power projects in Åland. The existing windmills in Åland supply 25% of the electricity demand and the target with the new windmills is that 70% of the demand will be met by wind power in the future. During good wind conditions the windmills will be able to export electricity to Sweden and Finland after the new cable has been built.
Due to the closing of the reserve power plants, the project will result in a decrease of 300 tonnes of CO2 annually. Considering that NIB finances 48% of the project, NIB's loan contributes to a decrease of greenhouse gas emissions of approximately 140 tonnes of CO2 per year.
As a result of the launch of the new electricity transmission link, two gas-fuelled reserve power units (11.4 MW each) can be closed. The main environmental impact will occur during the construction phase. The impact is mainly related to laying the subsea cable, which will cause temporary changes in water quality.