All agreed loans

Iceland. Landsvirkjun

Date of agreement: 29 Jun 2016
Country: Iceland
Customer: Landsvirkjun
Amount in USD: USD 50 million
Amount in EUR: EUR 45.1 million
Maturity: 16 years
NACE sector / loan type: Electricity, gas, steam and hot water supply
Business area: Energy and water


The loan has been provided for financing the construction of the first phase of the Theistareykir geothermal power plant near the town of Húsavik in northeast Iceland.

In this first phase, two units with an electricity production capacity of 45 MW each will be constructed. The planned commissioning of Unit 1 is set for October 2017, while Unit 2 will become operational in spring 2018.

The area in which the Theistareykir plant is located is assessed to have geothermal capacity for the generation of up to 200 MWe. The plant will mainly cover the electricity demand of the silicon metal production plant that is currently being constructed by PCC BakkiSilicon hf on the outskirts of Húsavik. A third of the produced energy will be made available to the municipalities of Húsavik and Akureyri, as well as other local industry.

Theistareykir is part of the infrastructure project that accompanies the construction of PCC’s silicon metal plant, which further includes a new high-voltage transmission line and an access road.

Landsvirkjun is owned by the Icelandic state and is the country’s largest electricity producer. The company generates energy from renewable sources and focuses on hydro and geothermal power. Landsvirkjun generates around 70% of all electricity used in Iceland.

Fulfilment of NIB's mandate


The Theistareykir plant is assessed to contribute to an increase in national electricity production of 4%, as well as an overall increase in geothermal power generation of 13.5%. This is expected to expand the country’s electricity market and to improve competition. The objective of the project is to contribute to a more sustainable production of silicon metal for the world market based on renewable energy.


The utilisation of the geothermal resources at the Theistareykir plant is aimed at sustainable energy production. However, Theistareykir is catering to the silicon plant in Húsavik. The mining of silica and the production of silicon metal are associated with negative environmental impacts.

Sustainability summary

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

Geothermal energy generation causes emissions of carbon dioxide, hydrogen sulphide and hydrogen gas. However, the emission rates of Theistareykir are expected to be lower than those of other geothermal power stations. Further, the plant will not produce emissions of sulphur dioxide, nitric oxides or particulate matter. The need to discharge separated geothermal water at a suitable depth to avoid earth tremors is taken into account in the design of the drilling wells of the plant.

A major concern is the visual impact that the facility and access road will have on the surrounding lava field and nearby wetland. Therefore, mitigation methods have been included in the construction plan to preserve the local environment and reduce negative visual impacts as much as possible.

Press release

Norræni fjárfestingarbankinn fjármagnar jarðvarmavirkjun á Íslandi