ERR News – Estonian national grid operator Elering and the Nordic Invest-ment Bank (NIB) signed a credit contract on April 26, for 15 million euros with the goal of funding the const-ruction of a new 330 kilovolt transmission line through Tartu, Viljandi and Sindi.
The total cost of the project will be 34 million euros. The new Tartu-Viljandi-Sindi transmission line is expected to increase the capacity of the Estonian power grid in the east to west direction and secure the energy supply in the Pärnu area, serving as a prerequisite for building a third Estonian-Latvian power line.
In addition, it will also enable new power plants in western Estonia to be hooked to the grid. The construction of the line started in 2011 and will be completed in 2014.
According to Elering CFO Peep Soone, the repayment period will begin in 2017 and stretch through 2032. "It is especially beneficial for Elering because during the most intensive investment period between 2012 and 2014, when we will invest 378 million euros in the grid, we will not be paying back the loan. In addition, the interest rate will be fixed before we draw the loan," Soone said.
The NIB loan is second in a row for Elering. In 2010, an initial contract for 25 million euros was signed in order to finance the construction of the second underwater cable between Estonia and Finland, EstLink 2.