The Nordic Investment Bank (NIB) and Norwegian utility company Sogn og Fjordane Energi AS have signed a 15-year loan agreement of €30 million (US$33.3 million) to finance the construction of a new 47-MW hydropower plant in Østerbø, as well as a 20-km regional power line.
The Østerbø plant, located on the Sognefjord in the municipality of Høyanger, will have a single turbine-generator unit and produce an annual electricity output of 165 GWh. In addition, a 20-km-long regional power line connecting the plant’s power station to Stordalen in Masfjord municipality will be installed.
NIB says the investment will increase the security of local electricity supply and add production capacity, serving households and businesses in western Norway.
The project is eligible for financing with NIB Environmental Bonds, as the plant has a water reservoir that allows it to store and balance fluctuating generation and demand patterns. Thus, the production can be maximized during peak load hours, which indirectly cuts greenhouse gas emissions more than in conventional run-of-river hydropower stations, NIB says.
Sogn og Fjordane Energi AS owns 15 power plants and shares in five throughout the Sogn og Fjordane region.
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.
The bank’s previous support of hydroelectric power includes a loan deal to build the Storaselva hydropower plant and rehabilitate the Byafossen hydro project, in 2017.