Signing of loan agreement between Reykjavik Energy and Nordic Investment Bank (source: Reykjavik Energy)
The Nordic Investment Bank has granted Reykjavik Energy a EUR 32 million loan for the capacity expansion work at the Hellisheidi geothermal plant in Iceland.
Reykjavik Energy (Orkuveitan) and Nordic Investment Bank (NIB) have signed a 10-year loan agreement for ISK 4,626 million (approx. EUR 32 million) that will go towards capacity expansion efforts at the Hellisheidi geothermal power plant in Iceland.
The project envisions an increase in thermal production capacity from 220 MWth to 345 MWth, as well as the drilling of a new production well that is expected to deliver a net electric output of 5MWe. There is also a plant to build a new maintenance and storage facility.
The whole capacity expansion project is expected to cost ISK 6,338 million (approx. EUR 44.2 million).
“This investment is an important step in strengthening the resilience and capacity of our geothermal system to meet growing demand in the capital area,” said Sævar Freyr Þráinsson, CEO of Reykjavik Energy.
“As demand for hot water and electricity continues to rise, it is essential to invest in infrastructure that is both sustainable and future-proof. By expanding production at ON Power’s Hellisheiði power plant, we are ensuring a secure, efficient and reliable energy supply for our communities, while maximising the value of Iceland’s clean geothermal resources.”
With a growing population, the hot water demand in the capital of Reykjavik is expected to increase annually by 120 liters per second. As reported initially, the aim for the capacity expansion project is to increase the flow of hot water from Hellisheidi by 600 liters per second. The construction work for thermal capacity increase is expected to be completed by the end of 2026.
Reykavik Energy had also recently reported the early-stage discovery of a new geothermal resource in Meitlar, which could provide additional capacity to Hellishedi.
“We are pleased to support Reykjavík Energy, a long-standing client of NIB, as they continue to strengthen security of supply through investments in geothermal infrastructure to meet the growing demand,” commented André Küüsvek, President and CEO of NIB.
Source: Nordic Investment Bank