The European Investment Bank has signed a loan for EUR 190 million (1) with Eltra, a non-profit co-operative society wholly owned by 47 municipal or consumer-owned electricity distribution companies in Denmark. The loan will benefit the reinforcement and expansion of the high voltage grid through both domestic links as well as international connections to Sweden.
"The Danish electricity sector is well-known to the EIB", EIB Vice-President Michael Tutty, responsible for Denmark, said. "We are very pleased to support such a fine company as Eltra to reinforce and expand its high voltage grid in accordance with sustainable development objectives such as rational use of energy and corresponding environmental benefits", Mr Tutty commented.
Eltra's Chief Executive, Mr Georg Styrbro, pointed out that Western Denmark constitutes an electrical bridge between the Nordic electricity market and the continent. "The EIB loan is to enhance infrastructure in a significant transit territory. This implies the renewal of the 37-year-old cable connection (Konti-Skan 1) between Western Denmark and Sweden as well as the construction of a new north-south 400 kV line", he said.
The AAA-rated European Investment Bank (EIB), the financial arm of the European Union, contributes by means of its long-term loans towards the integration and balanced development of its Member States as well as in countries outside the Union.
With the EIB loan, Eltra can improve the financial resources available to fulfil and consolidate its role as operator of Western-Denmark's (part of which is an Objective 2 region) electricity system and owner of the electricity grid. The EIB loan will also underpin long term financing from commercial banks and will give Eltra a substantial degree of certainty in long term funding in a sector that is becoming further liberalised in accordance with EU Directives.
One of Eltra's most important activities is to promote electricity production with an acceptable environmental impact, which (with 44% of total electricity production in 2000) is a distinguishing feature of the electricity sector in Western Denmark. The project concerns a more efficient dispatch of generating capacity, in particular renewable sources of electricity, which will account for about half of energy transmitted. The project will also improve links between Denmark and Sweden to allow for increased international electricity trade.
In Denmark, the EIB has since 1973 extended loans totalling over EUR 12 billion for infrastructure investments, notably roads, railroads, bridges and telecommunication as well as investments within the energy, environment and the industry sector. In addition to large projects, the EIB has financed small and medium-sized public and private investments through credit lines (Global Loans) to financial intermediaries.
(1) 1 EUR = DKK 7.4301 on 19.02.02