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    Reference: 20150480
    Release date: 25 April 2016

    Promoter – Financial Intermediary

    ORKUVEITA REYKJAVIKUR

    Location

    Description

    The project comprises extension works on two geothermal power plants outside Reykjavik and refurbishment of the district heating system and electricity distribution system in Reykjavik. The extensions at the power plants are done to sustain production levels by drilling additional wells and to meet environmental requirements by increasing re-injection. The district heating investments comprise some 30 km of new and renewed piping, pumps and tanks. The electricity distribution investments comprise some 30 km of new or renewed underground cables, one new medium-voltage substation, additional transformer capacity and a new SCADA-system. New meters to comply with EU directives are also implemented in both heat and electricity distribution.

    Objectives

    The project uses renewable geothermal energy to generate electricity in Iceland, predominantly to meet demand from the energy-intensive industrial facility. The project therefore supports EU and national policy to promote renewable energy. Moreover, the project will contribute to economic growth and diversification in a remote, less-developed region.

    Sector(s)

    Proposed EIB finance (Approximate amount)

    EUR 70 million

    Total cost (Approximate amount)

    EUR 144 million

    Environmental aspects

    The main environmental risk relates to geological hazards (volcanic eruptions and earthquakes), while the main concerns are related to noise during construction and impact on a protected lava field and nature conservation area which the access road will cross. Additionally, the project will emit carbon dioxide and hydrogen sulphide. Mitigation measures in line with industry practice are proposed.

    Procurement

    Iceland, as a signatory to the European Economic Area (EEA) Agreement, has adopted EU procurement legislation. The Bank will require the promoter to ensure that any procurement procedures are done in accordance with the Bank's Guide to Procurement and the relevant applicable EU public procurement rules.

    Status

    Signed - 15/12/2016

    Disclaimer

    Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The data provided on this page is therefore indicative and cannot be considered to represent official EIB policy (see also the Explanatory notes).

    Related tags

    Iceland Energy