Landsvirkjun secures project financing for Theistareykir Geothermal Power Plant

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Landsvirkjun secures project financing for Theistareykir Geothermal Power Plant

Iceland-based power producer Landsvirkjun has signed an ECA (Export Credit Agency) loan agreement in relation to a supply contract for two 45 MW geothermal turbines from Fuji Electric for the Theistareykir Geothermal Power Plant, scheduled to commence operation in 2017.

The Japan Bank for International Cooperation (JBIC) provided buyer's credit totaling up to USD 34 million at a fixed interest rate. Citibank Japan Ltd. (lead arranger), Bank of Yokohama and Commerzbank AG, Tokyo Branch, co-financed up to USD 34 million at a floating rate, with Nippon Export and Investment Insurance (NEXI) providing insurance, bringing the total financing amount to up to USD 68 million.

JBIC/NEXI-backed financing has achieved a 20 year tenor without a guarantee of collection. This is the first JBIC-NEXI buyer’s credit facility for a renewable energy project within High Income OECD Countries.

The JBIC/NEXI-backed financing was supported by Takanawa Japan KK, as an Advisor, and Citigroup, as a Coordinator.

Hordur Arnarson, CEO:

“This is a milestone agreement for Iceland and Japan since this is the first ECA financing Iceland receives from Japan. We are very pleased with the support from the Japanese institutions to finance our first geothermal renewable energy project.“

Over a period of 10 years, Landsvirkjun has invested heavily in researching geothermal areas in this area. An EIA for up to a 200 MWe power plant in Theistareykir has been completed. Full project design started in the beginning of 2012, handled by Mannvit, in collaboration with Verkis.

Five exploration wells were drilled in 2002 and 2003. The first production well drilled in 2002 was promising and yielded 6 MWe. Landsvirkjun plans to build the plant in two 45 MWe phases. Seven production wells have been drilled to date, providing enough steam for the 1st phase. 

The company operates hydropower, geothermal and wind power plants and generates about 75 % of the country’s total electricity.

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