Reykjavík Energy and Nordic Investment Bank enter green financing agreement

The use of hot water has significantly increased in line with the construction of new housing in recent years. Also, the demand for thermal energy from various industries is also growing, resulting in Veitur Utilities revising plans for obtaining geothermal water. In recent years, the increased demand has been entirely met by upgrading capacity in the power plants of the sister company, ON Power, in the Hengill high-temperature area. Increased geothermal exploration is now also planned in low-temperature areas in the vicinity of Reykjavík. The use has also called for diverse measures to increase the transmission capacity of the district heating system to certain parts of the capital area.

ON Power operates geothermal power plants at Nesjavellir and Hellisheidi. Their combined electrical capacity is 423 MW. Additionally, the hot water production in the power plants currently covers more than half of the heating needs in the capital area. In order to maintain responsible utilisation, more steam must be obtained from the Hengill geothermal area, which is one of Iceland‘s largest. Drilling is planned and the doubling of a steam pipeline from the utilisation area at Hverahlíð.

Sævar Freyr Þráinsson, CEO: “I welcome this agreement with the Nordic Investment Bank regarding financing our important renewable energy projects, but the bank has previously financed many of our most extensive investments in renewable energy generation and environmentally friendly utilities.

“The demand for renewable energy and reliable services of the respective utility systems is growing rapidly. We at OR Group have ambitions for people's quality of life and to be enablers of a robust green economy. After the recent events on the Reykjanes Peninsula, we also need to consider long-term energy security in a new light.

“It is good to have diverse financing options. The working capital from our operations to cover investments is solid. OR has also been successful in issuing green bonds, and this direct green debt financing of NIB is important. All the while, financing the groundbreaking climate project of Carbfix in Straumsvík is underway through selling new shares. It is crucial to have such choices when projects are large and urgent.”

For more news and technical articles from the global renewable industry, read the latest issue of Energy Global magazine.

Energy Global's Winter 2023 issue

The Winter 2023 issue of Energy Global hosts an array of technical articles weather analysis, geothermal solutions, energy storage technology, and more. This issue also features a regional report looking at the future of renewables in North America, and a report from Théodore Reed-Martin, Editorial Assistant, Energy Global, on how Iceland utilises its unique geology for renewable energy.

Read the article online at: https://www.energyglobal.com/other-renewables/18122023/reykjavk-energy-and-nordic-investment-bank-enter-green-financing-agreement/