The European Investment Bank (EIB) will lend EUR 170m to Orkuveita Reykjavikur (Reykjavik Energy) for the expansion of its geothermal power capacity. The finance contract was signed today in Reykjavik by EIB Vice-President Eva Srejber and on behalf of Orkuveita Reykjavíkur the Chairman of the Board, Guðlaugur Gylfi Sverrisson and the CEO, Hjörleifur B. Kvaran.

The project concerns the expansion of the Hellisheidi geothermal complex by an additional 90 MW and the construction of a new 90 MW geothermal power plant at Hverahlíð. The objective of these new power units is mainly to meet increasing demand for electricity in the export-orientated industrial sectors, notably supplying one existing and one new aluminium smelter. The project therefore supports EU policy to promote the use of renewable energy globally and to fight climate change.

“We are pleased to support this environmentally-friendly technology for a project contributing to economic recovery in Iceland and to continue co-operation with our established partner, Orkuveita Reykjavikur”, said EIB Vice-President Eva Srejber.

Note for the editor:

The European Investment Bank is the European Union’s long-term financing institution lending for investments that contribute to achieving the EU’s objectives. Founded in 1958, it operates in the 27 EU Member States, the EU’s neighbour countries and more than 100 other countries around the globe. The Bank can, since 1994, lend to eligible projects in Iceland under the EFTA Facility.  This mandate enables the Bank to support projects notably in the sectors of energy, environment, trans-European networks (TENs) and research, development and innovation located in the territories of the EFTA countries (Iceland, Liechtenstein, Norway and Switzerland). The EFTA Facility was recently extended for a further four-year period (2010-2013) allowing additional loans totaling EUR 800m to be committed.   

Orkuveita Reykjavikur is Iceland’s largest multi-utility provider, delivering electricity and hot water, generated predominantly from geothermal sources, as well as drinking water and wastewater services to more than two thirds of the country’s population.