The European Investment Bank (EIB) is lending EUR 25 million for the upgrading of two existing hydroelectric power plants on the Kemijoki River in Lapland, northern Finland. The loan will co-finance the modernisation of the Permantokoski and Ossauskoski hydropower plants involving a capacity increase of around 30% to 140 MWe.
The upgrading and refurbishment of these facilities will have no discernible environmental impacts and is considered to be the least cost option for power generation. Kemijoki Corporation, the borrower and promoter, was established in 1954 to tap the hydropower potential of the
Kemijoki river catchment area and employs 300 people in Lapland. The total capacity of its 20 plants is 1008 MW, corresponding to 34% of Finland's hydropower capacity.
The project is in line with EU renewable energy policies and will help Finland to meet its commitments with respect to greenhouse gas emission reductions.
Mr Sauli Niinistö, the EIB Vice-President responsible for the Bank's lending in Finland, Sweden, the Baltic States and Russia, commented: The EIB welcomes and supports the use of renewable energy as it has positive impact in terms of slowing down climate change. This project will serve to foster the economic development of the Lapland region, which is a less favoured area, while preserving its natural environment.
The European Investment Bank, the long-term financing institution of the EU, funds economically viable investment projects fostering EU integration. The Bank has provided loans in Finland totalling EUR 383 million in 2005 to date and more than EUR 3.6 billion during the past five years (2000-2005).
In order to support the EU's policy objectives of greater use of renewable energy and reduced greenhouse gas emissions, the Bank decided in 2004 to increase its lending for renewable energy projects to up to 50% of its financing for new electricity generation in the EU by 2010.