Elering borrows 15 million euros from Nordic Investment Bank

Today, on 26 April, Elering and the Nordic Investment Bank (NIB) signed a loan contract for 15 million euros with the goal to fund the construction of a new 330 kV transmission line to run through Tartu, Viljandi and Sindi. The total cost will be 34 million euros.

The new Tartu-Viljandi-Sindi transmission line will increase the capacity of the Estonian electricity network running east to west; it will significantly increase the security of the energy supply in the Pärnu area and create an opportunity for building a third Estonian-Latvian power line in the future. In addition to increasing the security of the energy supply, it will also enable new power plants in western Estonia to be connected to the electricity network. The construction work started in 2011 and will finish in 2014.

According to Peep Soone, CFO at Elering, the NIB loan has a significantly longer tenure compared to standard offers from commercial banks and currently the repayment period will be between 2017 and 2032. "It is especially beneficial for Elering because during the most intensive investment period between 2012 and 2014 when we will invest 378 million euros in the electricity network, we will not spend money paying back the loan. In addition, the interest rate will be fixed before we draw the loan," adds Soone.

This loan is already the second funding from NIB. In 2010, an initial loan contract of 25 million euros was signed and the goal was to finance the construction of the second cable between Estonia and Finland – EstLink 2.

Elering is Estonia’s transmission system operator, whose primary mission is to ensure constant high-quality electricity supplies to Estonian consumers. To ensure consistent supply, Elering maintains and develops the national transmission network and external connections. Elering manages Estonia’s electricity network in real time, ensuring the operation of the transmission network and balanced production and consumption.

More information about the Tartu-Viljandi-Sindi power line is available here.