NIB and Varanger Kraft Collaborate on Green Energy Upgrade and Hydrogen Production in Norway

NIB and Varanger Kraft Collaborate on Green Energy Upgrade and Hydrogen Production in Norway

(IN BRIEF) The Nordic Investment Bank (NIB) has entered into a seven-year loan agreement with Norwegian utility company Varanger Kraft to support the upgrade of their hydrogen facility and the improvement of the electricity distribution network in Norway’s Varanger region. A portion of the NOK 50 million (EUR 4.3 million) loan will be used to co-finance Varanger Kraft’s Berlevåg hydrogen production facility, featuring a 2.5MW electrolyser and aiming to produce hydrogen for regional use by late 2024. This project is set to benefit multiple industries, including maritime and terrestrial transport. In addition to hydrogen production, Varanger Kraft is enhancing its electricity distribution infrastructure to bolster power supply security. The collaboration underscores NIB’s commitment to promoting innovation and energy efficiency while supporting Varanger Kraft’s sustainable energy initiatives in northern Norway.

(PRESS RELEASE) HELSINKI, 27-Sep-2023 — /EuropaWire/ — A segment of the NOK 50 million (EUR 4.3 million) loan will co-finance Varanger Kraft´s Berlevåg hydrogen production facility. This facility encompasses a 2.5MW electrolyser, hydrogen compressors, and a storage tank, aiming to produce hydrogen for regional use by late 2024. The potential beneficiaries of this hydrogen output span multiple industries including maritime and terrestrial transport.

While the region has limited grid capacity, it is the location of Varanger Kraft´s Raggovidda wind power project. This wind farm boasts a load factor of approximately 50%, establishing it amongst Europe’s premier land-based wind power plants in efficiency. The hydrogen facility will contribute to grid balancing and make use of the surplus wind energy.

The hydrogen project demands an overall investment of NOK 45.3 million. NIB´s contribution, covering 44% of the loan sum, is entirely eligible for financing through NIB Environmental Bonds.

In a separate project, Varanger Kraft is enhancing its electricity distribution infrastructure on the northern edge of Varangerfjorden. This enhancement involves the replacement of 36 kilometres of ageing lines to strengthen the security of power supply. The budget set aside for this sub-project between 2023 and 2026 stands at NOK 62.1 million.

“This loan agreement with Varanger Kraft shows our commitment to driving innovation and ensuring energy efficiency. By harnessing the potential of renewable energy and improving power infrastructure, Varanger Kraft is laying the foundation for a greener, more resilient tomorrow,” says André Küüsvek, President and CEO of NIB.

NIB is currently co-financing three new high voltage (132 kV) lines, four new substations and the refurbishment of two older substations with a NOK 235 million loan agreement signed in 2021.

Varanger Kraft, established in 1938, is a utility company serving northern Norway. Specialising in the production of renewable energy from hydro and wind sources, it also offers services to grid operators and power plants. Beyond energy production and distribution, Varanger Kraft, whose headquarters are in Vadsø, manages power transmission networks and delivers telecom services. The company is owned by the municipalities of Sør-Varanger, Vadsø, Deanu/Tana, Båtsfjord, Berlevåg, Vardø and Unjarga/Nesseby.

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. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

Media Contact:

Patrik Marckert
Senior Banker
+358 10 618 0266
patrik.marckert@nib.int

Arild Moen
Associate Director, Communications
+358 10 618 0496
arild.moen@nib.int

SOURCE: Nordic Investment Bank