All agreed loans

Norway. Sogn og Fjordane Energi AS

Date of agreement: 23 Jun 2014
Country: Norway
Customer: Sogn og Fjordane Energi AS
Amount in NOK: NOK 286 million
Amount in EUR: EUR 34.4 million
Maturity: 15 years
NACE sector / loan type: Electricity, gas, steam and hot water supply
Business area: Energy and water

Project

The loan has been provided for upgrading and replacing old overhead electric lines during the 2013–2015 period to increase distribution capacity and connections to new production units.

The expected enhanced security of supply could result in increased productivity and less inconvenience for customers, improving the efficiency of the economy. The project provides possibilities to initiate new renewable energy projects in the region. Currently no new generation concessions can be granted due to the congested network.

The upgrade and replacement project would enable distribution of increased production capacity of around 200 GWh annually.

Given that the mid-Norway region has a shortfall in electricity supply of around 7 TWh, the increased generation capacity in Sogn and Fjordane could reduce the need for imports from outside the region. This however, is dependent on the national transmission system operator Statnett completing a transmission interconnector from Ørskog in Sunnmøre to Fardal in Indre Sogn. The new transmission interconnector is scheduled to be operational in 2016.

Sogn og Fjordane Energi produces about 2,100 GWh of hydroelectricity annually, and operates a distribution network with 23,000 customers in Western Norway. The company is owned by Sogn og Fjordane County Council and eight neighbouring municipalities.

Fulfilment of NIB's mandate

Competitiveness:

The project will reduce congestion in electricity distribution and enable connection of new generation capacity.

Given that central Norway has a shortfall in electricity supply, increased generation capacity in the region of Sogn and Fjordane combined with the completion of Statnett’s expansion of the Ørskog–Fardal line, will reduce the need for imports from outside the region.

Enhanced security of supply may result in increased productivity and less inconvenience for customers, improving the efficiency of the economy.

Environment:

An inventory has identified potential for further development of small scale hydropower generation as well as wind power generation in the region. The increased distribution capacity due to the Sogn of Fjordane project will enable development of such additional renewable power generation.

Sustainability summary

This is a project with a potentially extensive environmental and/or social impact (category A, read more)

Substations and transmission lines do normally not give rise to major environmental concerns and NIB has not carried out a full sustainability review of all subprojects in this investment programme. Only project with necessary concessions issued are included. NIB has performed random inspections and no environmental concerns have been identified. Needed servitudes are obtained prior project implementation in accordance with Norwegian praxis.

Press release

NIB finansierer mer elektrisitet distribusjonskapasitet i Norge