12 Dec 2019
EUR 17.5 million
Infrastructure, transportation and telecom
|Date of agreement:||12 Sep 2013|
|Amount in EUR:||EUR 22 million|
|NACE sector / loan type:||Electricity, gas, steam and hot water supply|
|Business area:||Energy and water|
This loan contributes to climate change mitigation: 10%
The loan has been provided for financing of a number of transmission network reconstruction investments across Lithuania scheduled to be finalised by the end of 2016. The investment aims to improve the security and reliability of the transmission network and to prepare for integration with Nordic and European electricity markets.
The projects cover the reconstructions of the Klaipėda and Panevėžys substations, the Šiauliai substation and switchyard, and other smaller 110 kV switchyards. The projects are budgeted at a total cost of EUR 45 million, and are part of Litgrid’s EUR 478 million investment programme for 2013–2017.
The projects are required for strengthening the internal power system since a large part are old and outdated. The replacement and reconstruction of the Klaipėda transformer substation has a direct impact on the connection to the NordBalt project, where the converter to the cable will be located to enable the connection to the Nordic power system. Investments will support the national target to diversify energy imports and become integrated into the common Baltic and Nordic electricity market to ensure a reliable and stable energy supply.
The Lithuanian electricity transmission system operator Litgrid AB is responsible for integrating the national power system into the European power infrastructure and electricity market. The state-owned company employs 220 people and is responsible for constructing the strategic electricity cross-border links NordBalt (Lithuania-Sweden) and LitPol Link (Lithuania-Poland).
In order to join the European power system and adopt European standards for power system control, the investments during the next five years target measures to prepare the power system into the grids of Europe enabled by the power links to Sweden (NordBalt 700 MW) and Poland (LitPol 1,000 MW). Improved performance and accessibility of electricity are likely to allow for increased economic activities and more efficient use of production capacities. Electricity demand is expected to grow by 2% annually.
Litgrid will after implementation of the 2013-2017 investment programme, of which the NIB-financed project is a part, have network losses of around 2%.
The 2013–2017 investment programme is expected to result in a decreased loss of electricity of 2,200 MWh annually. The indirect reduction of greenhouse gas emissions of the NIB-financed project (10%) has been calculated at 70 tonnes per year.
The figure is based on the assumption that the corresponding amount of electricity will not be generated, using the national grid factor for CO2 in Lithuania. The potential leakages from the new SF6 (sulphur hexafluoride, a greenhouse gas) containing circuit breakers have been taken into account and their amount was estimated to be insignificant, less than 2 tonnes of CO2 equivalent per year.