All agreed loans

Finland. Leppäkoski Group Oy

Date of agreement: 14 Dec 2020
Country: Finland
Customer: Leppäkoski Group Oy
Amount in EUR: EUR 10 million
Maturity: 10 years
NACE sector / loan type: Electricity, gas, steam and hot water supply

Project

The loan has been provided for Leppäkoski Group to develop the electricity distribution network in order to improve security of supply and meet the demands of future electricity usage in the Pirkanmaa and Satakunta areas during 2021-2024.

The network investments include cabling to replace some of the existing overhead lines as well as the replacement of old transformers. Enabling Leppäkoski Group to move some of its network from using overhead lines to underground cables makes the network both more energy efficient and weatherproof. Thus, the investment project will improve security of supply by reducing the likelihood of electricity outages caused by, for instance, unpredictable weather. 

Besides strengthening the existing network, the investment is expected to enable Leppäkoski Group to have more small-scale renewable installations (mainly solar panels) integrated into their network. In 2019, there were 300 small-scale solar power generators in the network and this amount is expected to double in 2020.

Established in 1919, Leppäkoski Group is an energy company providing electricity, district heat, natural gas and other energy solutions in the Pirkanmaa and Satakunta areas. The group consists of the parent company Leppäkoski Group Oy and its fully-owned subsidiaries Leppäkosken Sähkö Oy, Leppäkosken Lämpö Oy, Leppäkosken Energia Oy and Grid.vc Oy.

Fulfilment of NIB's mandate

Productivity:

The investment program upgrades the distribution network and the main benefit from the project is improved security of supply.

In 2019, the company has 46 per cent of its electricity distribution network of 4,280 kilometres cabled underground. Recent weather related damages to the network have caused more downtime to the company’s customers than to those of other large networks in Finland, illustrating that the network can be less resilient than the other networks of similar size. Since majority of the project involves underground cabling and other measures to mitigate network damages, the project will reduce the operational costs of the company and compensations the company incurs to its customers from network damages.

In 2019, the company distributed 373 GWh of power to 26,000 households and 4,000 businesses.

Environment:

The main driver of the investment is to strengthen the security of supply according to the requirements of the Electricity Market Act.

Besides strengthening the network, it also enables the foreseen small-scale renewable installations (mainly solar panels) to be integrated to the network. The main environmental benefits include improved energy efficiency and reduced visual impact of the network due to underground cabling. The project reduces the power loss of the grid and, thus, also indirectly results in reduced CO2 emissions.

Sustainability summary

Project

The network upgrade works will be done mostly in areas where there already is existing infrastructure. Cable lines are laid mostly in the ground directly below the dismantled overhead power line.

Leppäkoski Group has a system for qualifying contractors that work for them. The qualification is part of their internal environment, health and safety system.

Counterparty

Leppäkoski Group has certified and recently audited (8/2020) management systems on environment (ISO 14001), health and safety (ISO 45001), quality (ISO 9001) and energy (ISO 50001). The company generated hydroelectricity 3,600 MWh (2019), which comprised 10% out of the total distributed electricity (373,000 MWh). Additionally the company owns shares of hydro, bio and wind power generation in the region.

Leppäkoski Group owns biomass boilers in Nokia, Ikaalinen and Parkano, which all operate on wood biomass. In addition, the Group owns shares of Nokianvirran Energia and Hämeenkyrön Voima bioboilers, which operate on wood biomass and peat.

In 2019, there were 300 small scale solar power generators in the network and the amount is to double in 2020.

Press release

NIB rahoittaa sähköverkkoinvestointeja Pirkanmaalla ja Satakunnassa

 

Press release

NIB finansierar investeringar i eldistributionsnät i Birkaland och Satakunta