All agreed loans

Iceland. RARIK ohf

Date of loan: 2 Mar 2016
Country: Iceland
Customer: RARIK ohf
Amount in EUR: EUR 25 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 financing the replacement of overhead electrical power lines with underground cables in Iceland.

RARIK ohf. plans to exchange around 1,450 kilometres of overhead lines with underground cables. The replacement work is scheduled to be finalised during 2020. The company estimates total project costs at EUR 50.1 million.

The project will reduce power outages and failures due to the impact from harsh weather conditions such as strong winds and ice. This is expected to improve RARIK’s cost efficiency of network operations.

The company has already replaced 4,700 kilometres of overhead lines with underground cables, which corresponds to 54% of the distribution network. The company aims to have its entire system below ground by 2035.

The electricity and heating distribution company RARIK ohf. serves areas outside of Iceland’s capital Reykjavik and distributes approximately 33% of all general energy in Iceland. The company’s electrical energy production is about 260 GWh annually. The subsidiary’s turnover represents approximately one third RARIK’s turnover. RARIK’s group employs about 200 people.

Fulfilment of NIB's mandate

RARIK’s network investment will improve the security of supply. By investing in underground cables, the company expects to increase its productivity due to a reduced need for network maintenance and network disruptions due to weather conditions. In 2015, RARIK distributed a total of 1,328 GWh of electricity to 41,400 customers. The company also operates through a subsidiary an independent energy sales company which sells and produces electrical power.

Sustainability summary

Only limited and temporary damage will occur when the cables are ploughed down. The trenches are ploughed and filled continuously as the cable is laid.

Press release

Norræni fjárfestingarbankinn fjármagnar aukið raforkuöryggi á Íslandi