Elering signs a 10 million euro loan to keep financing construction of EstLink 2

On Monday Elering signed a 20-year maturity loan agreement of 10 million euros with the Nordic Investment Bank within the programme for financing EstLink 2, the second power connection between Estonia and Finland.

The new loan will be taken in addition to a loan of 25 million euros from the Nordic Investment Bank for the same purpose in 2010.

“This summer clearly shows that isolated national energy markets need to be integrated as larger market areas with a versatile production capacity. In order to do so, we need physical connections between countries. Good power connections will also make the construction of some power plants unnecessary: they are not cost-effective on a small energy market but are needed for reliable electricity supply,” comments Taavi Veskimägi, Chairman of the Elering Board.

The total budget of the EstLink 2 construction is 325 million euros, of which Elering will fund around 170 million euros. The new loan will increase the amount lent to Elering by the Nordic Investment Bank for the financing of the project to 35 million euros, representing a fifth of Elering’s funding.

Work on the construction of the 650 MW EstLink 2 is intensive, but it is progressing according to plan, and the connection is expected to be operational for the market at the beginning of 2014.

Elering is Estonia’s independent and standalone transmission system operator, whose main task is to ensure that Estonia’s consumers enjoy a consistent, high-quality electricity supply. To ensure supply security, Elering maintains and develops the domestic transmission network and external interconnections. Elering manages Estonia’s electricity system in real time, ensuring the functioning of the transmission network and the balance between output and consumption.