NIB loan strengthens Icelandic electricity grid

The Nordic Investment Bank (NIB) has signed a 15-year USD 50 million investment loan with Iceland’s transmission system operator Landsnet hf. to finance the construction of new and upgrades of existing substations, investments in underground cabling and new overhead lines during 2023-2026.

The upgrades will particularly enhance the transmission system from North-East to South Iceland and along the country’s west coast, improving capacity and network stability for both the society and industry.

Landsnet has initiated construction of a new 220 kV ring network around Iceland, which will enhance transmission capacity to about 600 MW across key regions and boost security limits from 130 MW to 210-250 MW. This will optimise the use of existing power and accommodate growing electricity demands. The NIB financed investment programme is part of this process.

The NIB financed investment programme includes renovation and expansion of existing substations as well as greenfield substations. The substations represent the majority of the planned total investment. Further, the investments include Landsnet´s first SF6-free green gas substation that provides a best practice benchmark for the power transmission sector. Instead of SF6 (sulfur hexafluoride) gas, a potent greenhouse gas previously irreplaceable in high-voltage switchgear, the new substation is insulated by green gas. The investment programme also covers new and renewals of overhead lines.

NIB has provided sustainable financing to Landsnet through several loan agreements. The new loan is intended to enhance the transmission capacity, stability, and reliability of the Icelandic transmission system, enabling further utilisation of renewable energy sources.

Landsnet hf. is Iceland’s transmission system operator. Landsnet’s transmission system – ‘the grid’ – connects Iceland’s five generating companies to regional distribution networks and directly to large industrial energy consumers. The grid includes more than 3,300 km of transmission lines and about 80 substations and transformer stations. Landsnet is ultimately owned by the Icelandic State (93%) and the City of Reykjavik through Orkuveita Reykjavikur (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. Read more at www.nib.int

For further information, please contact
Kari Jaukkuri, Senior Banker, at +358 10 618 0237, Kari.Jaukkuri@nib.int

Iiris Anttalainen, Communications, at +358 10 618 0258, Iiris.Anttalainen@nib.int