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NIB offers $50m loan for expansion of transmission lines in Iceland

Nordic Investment Bank (NIB) has signed a ten-year loan deal with Iceland’s transmission system operator Landsnet Hf. to expand and strengthen the electricity network in the country.

The USD 50 million (EUR 42.51 million) loan has been provided to finance new overhead transmission lines connecting the Theistareykir geothermal power plant to the local and main grid and to the Bakki industrial area near Húsavík.

Connecting Theistareykir to the Bakki industrial area will support the development of energy-intensive industry in Iceland. This will have significant and long-term impacts on the economic activities in the region, mainly through 120 new jobs created directly in the Húsavík area, which has about 2,200 inhabitants. Through the connections to the local and national grid, more renewable power from Theistareykir will also become available for other Icelandic consumers.

The loan will also be used to finance the investments in strengthening the transmission network in the Skagafjördur area and on the Snæfellsnes peninsula. The project will improve the reliability of the network in regions where disturbances to electricity supply have been regular.

Landsnet hf is Iceland’s transmission system operator, and it owns and operates 3,300 km of transmission lines, 240 km of transmission cables, as well as 75 substations operating in the 66–220 kV range. The ultimate ownership is through state- and municipality-controlled power companies, and rests with the Icelandic state (93%) and the City of Reykjavik (7%).

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.