All agreed loans

Norway. Arva AS

Date of agreement: 2 Jul 2021
Country: Norway
Customer: Arva AS
Amount in NOK: NOK 400 million
Amount in EUR: EUR 40 million
Maturity: 7 years

This loan contributes to climate change mitigation: 100%

Facilities

Arctic Financing Facility (read more): yes%

Project

The loan has been provided for the improvement of the regional grid network in Northern Norway during 2020–2022.

The investment will enhance the distribution network and efficiency, and resiliency of the grid in the Arctic region.  This entails new power lines, cables, and sub-stations, but also the refurbishing of older grid solutions. In total, almost 700 kilometres of power lines and cable will be installed. The investments will enable further electrification of the region and connect new renewable energy assets.

Arva AS is the sixth largest regional grid and distribution company in Norway, established from a merger between the grid operations of Troms Kraft (Troms Kraft Nett AS) and of Bodø Energi/Dragefossen (Nordlandsnett AS) on 19.12.2020. The company is headquartered in Bodø but also has an office in Tromsø, where this project is carried out.

Fulfilment of NIB's mandate

Productivity:

As Arva’s s investments aim to upgrade and expand the regional network, it will address current grid constraints and enhance the security of supply, as well as enable connection of new renewable sources. Advanced grid network will provide further capacity to absorb the generation potential and support electrification efforts in the region.

In particular ports, the fishing industry, shipping, and transport will benefit from the improved access to electricity supply enabling expansion opportunities. 

Furthermore, Arva is also participating in an R&D project on a smart grid solution called “Smart Senja”. The largest fishing cluster of Norway is located on the island of Senja. The existing power grid there is considered insufficient to support the rapid development of local industries. Instead of building a new transmission line to the region, innovative technologies are tested there including the largest battery bank in Norway.

Expected productivity outcomes from the investment:

Additional transmission of energy (TWh)

Outcome of Smart Senja initiative

Reduced downtime

Environment:

The investment to upgrade the existing grid will enable the connection of approximately 300 MW of renewable energy capacity to the network.

Additionally, the investment will better meet the increased capacity demands due to the general electrification of the society, e.g., charging the infrastructure for vehicles, ports, and fish-farms. The electrification is expected to replace diesel electric and other fossil means of electricity supply and will crowd out the use of diesel-electric power sources.

Furthermore, a key climate change adaptation risk related to the network is the vulnerability of overhead power lines compared to underground cables. In this project, 34% of the electricity lines will be carried out as overhead power lines and the remaining part as underground cables. Thus, the investments are expected to contribute to a more climate resilient distribution system.

Expected environmental outcomes from the investment:

Additional renewable generation capacity connected (300 MW)

Additional transmission of renewable energy (800 GWh)

Sustainability summary

The project is not expected to have any significant impacts on the environment.

Press release

NIB låner ut til oppgradering av strømnettet i det arktiske Norge