Elering Signed a Contract with EIB for a 32 Million Euro Loan

Elering signed a contract with the European Investment Bank (EIB) for a 32 million euro loan in order to finance its emergency reserve power plant project in Kiisa, Estonia.

The loan term is 15 years and Elering has the possibility of utilising it in parts within one year since signing the contract. The loan interest rate is linked to the six months Euribor and the final interest rate of each loan part will be fixed once it is utilised.

Elering’s CEO Taavi Veskimägi said that “it is hard to overestimate the role of the Kiisa emergency reserve power plant for Estonian consumers in the event of any kind of electricity system failure. The plant has to be able to compensate for a tripped generator in the country or an interconnection in a matter of minutes in the event of a failure. The completion of the emergency reserve power plant is the last step in making EstLink 2 available to the market without restrictions. So from the point of view of security of supply for our customers, the emergency reserve power plant makes interconnections with neighbouring countries as safe as domestic generation capacities. As an energy sector enterprise, Elering values highly the long loan period offered by the EIB. A 15-year loan would not have been possible to obtain from commercial banks”.

Pim van Ballekom, EIB Vice-President responsible for the Bank’s operations in the Baltic states, commented: “The EIB, the bank of the EU, strongly promotes security of energy supply. We therefore particularly welcome this agreement with Elering, as the project will ensure the readiness to produce emergency power for Estonia, as well as for Latvia and Lithuania. We believe that the secure electricity supply itself is a pre-requisite of economic growth”.

The capacity of the Kiisa emergency reserve plant is 250 MW – the first unit was completed in 2013 and the second unit will be commissioned this year. The total cost of the project is around 135 million euros.

The emergency reserve power plant is necessary in order to ensure the functioning and recovery of Estonia’s electricity system in the case of a generation unit or interconnection failure. The emergency reserve power plant does not participate at the electricity market.