17 Mar 2011

NIB to finance the new Búðarháls hydropower plant in Iceland

NIB will provide a loan for Landsvirkjun to finance a new hydropower project in Búðarháls, southern Iceland. The 16-year maturity loan totalling USD 70 million (EUR 52.5 million) will help build the new hydropower plant expected to produce 585 GWh of electricity annually. 

The intake reservoir of the power station will be formed with a 2.1 km-long dam over the Köldukvísl river. The Búðarháls hydropower plant is planned to be finalised in 2014.

“Renewable energy is one of the cornerstones for the Icelandic economy. The country has a lot of unutilised potential in terms of renewable energy, and this potential can be realised by the implementation of capital-intensive, long-term projects, typical for energy projects,” says Johnny Åkerholm, NIB President and CEO.

“Energy is a focus sector for NIB. Securing access to reliable clean energy supply in our member countries is at the core of NIB’s mandate. With this loan, the Bank will help Iceland to produce more sustainable energy in the form of hydropower,” Mr Åkerholm adds.

Landsvirkjun is the biggest power generator in Iceland, producing the larger part of the island’s electricity. The electricity is sold on long-term contracts to power intensive industrial companies and Icelandic utilities. The State of Iceland is the sole owner of the power company, which owns 13 hydropower plants and two geothermal power plants with a total installed capacity of 1,860 MW.

The Nordic Investment Bank is the common international financial institution of the eight Nordic and Baltic countries. NIB provides long-term financing to the energy, environmental, transport, logistics and communications, and innovation sectors for projects that strengthen competitiveness and enhance the environment. NIB has the highest possible credit rating, AAA/aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact:

Mr Jukka Ahonen, Communications Director, at +358 10 618 0295, jukka.ahonen@nib.int

Ms Nina Monsen, Senior Communications Specialist, at +358 10 618 0291, nina.monsen@nib.int