Nordic Investment Bank finances hydroelectric station in Norway

NIB has signed a 15-year-maturity loan with Norwegian power and telecommunication enterprise Lyse AS to finance the construction of a high-performance hydroelectric station in Rogaland County, Norway.

The NOK 950 million (€113 million) loan will fund the construction of the hydropower plant Lysebotn 2, to be located inside a mountain at the end of the Lysefjord in the municipality of Forsand in Rogaland, southern Norway.

The surrounding river system is already regulated and adapted for hydropower generation. Since all the major construction work will be carried out inside the mountain, only minor environmental impacts are expected.

The 370 MW Lysebotn 2 is one of the largest hydroelectric power projects in Norway, and will replace the existing 210 MW Lysebotn 1 plant when commissioned in spring 2018. The annual electricity production is then expected to increase by 14% to 1,500 GWh.

Lysebotn 2 will use existing reservoirs and dams, but the increased hydraulic capacity will render production volumes more flexible, so fluctuations in wind power and price variations can be met more easily.

The new plant will include two Francis turbines with a capacity of 185 MW each, as well 7,800 metres of new water pipelines and new tunnels with a total length of 11,000 metres.

The considerably increased performance of the new power station will enable Lyse AS to provide electricity for 75,000 households and to support the efficient functioning of the electricity market.

Henrik Normann, President & CEO of NIB, said:

“Improving the output of an already regulated watercourse ensures a stable electricity supply and balances demand, without making new encroachments into the surrounding natural habitat.”

Eimund Nygaard, CEO of the Lyse Group, said:

“Lysebotn 2 is the largest hydroelectric project that Lyse Group has completed, and fully developed the project will provide a significant production of renewable energy adapted to meet the future energy market. The cooperation with NIB contributes to a good financing solution for the project.”

Lyse AS’ core business is the production of energy, stemming mainly from hydropower, as well as the provision of telecommunication products and related infrastructure. Its product range further includes natural gas, heat and refrigeration.