The EU bank

While the European Commission is today unveiling a new energy technology plan, the EIB – the EU’s financing institution – is providing funding for a major European energy project to link the Netherlands and Norway by means of the world’s longest undersea power transmission cable.

Torsten Gersfelt, EIB Vice-President, and Mel Kroon MBA, CEO of TenneT B.V., the national transmission grid of the Netherlands, today signed a finance contract worth EUR 140 million for the construction of a cable between the Netherlands and Norway, known as the NorNed project.

NorNed will be a 580 km-long HVDC hybrid bipolar submarine power cable link across the North Sea between Eemshaven (in the Netherlands) and Feda (in Norway), crossing Danish and German waters and interconnecting the two national power grids. Its promoters are the transmission system operators (TSOs) of the Netherlands and Norway, TenneT B.V. and Statnett S.F.

In this joint venture, TenneT and the Norwegian TSO Statnett will together invest a total of some EUR 600 million. The EIB, which is also considering a loan of an equal amount to Statnett, will finance nearly 50% of the NorNed project – which is an Energy-TEN project.

For the European Investment Bank, whose remit is to finance capital investment furthering European Union policies, the development of the trans-European energy, transport and telecommunications networks (TENs) is a prime objective. The promotion of sustainable, competitive and secure sources of energy is also a key policy objective of the EU and another lending priority of the EIB.

At the signing ceremony at the EIB’s headquarters in Luxembourg, EIB Vice-President Torsten Gersfelt described NorNed as a major innovative trans-European network project and praised it for also meeting the European Energy Policy. He stressed: “We all know how crucial it is for all of us to take concrete action in the energy sector. By interconnecting the electricity markets of the Netherlands and Norway, NorNed will enable the transmission and trading of electricity between the two countries, taking advantage of differences in the power generation structures in both countries and in the near future making market coupling between Scandinavia and Central West Europe possible.”

Mel Kroon stated: "Indeed, with the NorNed cable we will link the Dutch and Nordic national grid systems and electricity markets, which are currently not connected. This will help ensure the continued security of supply and enable more efficient use of the generation capacities in both countries, for example with better utilisation of thermal capacity in the Netherlands during off-peak hours and of hydro resources in Norway during wet years”.

Note to the Editor:

As the European Union’s long-term financing institution, the EIB has been the main source of funding for the trans-European networks (TENs), providing more than EUR 93 billion, of which EUR 10.4 billion has so far been earmarked for energy networks.

The promotion of sustainable, competitive and secure energy is also a key policy objective of the EU, and in 2007 the EIB made support for Europe’s energy needs a top lending priority, setting as targets: the increase of renewable energy, energy efficiency and energy saving, research and development in energy, and security and diversification of supplies. In 2006, the EIB provided EUR 4 billion in loans for energy investment projects and has already made available nearly EUR 4.5 billion in 2007.