The European Investment Bank (EIB) will provide a loan of €125 million to finance a new geothermal power station and its geothermal wells in Theistareykir, Iceland.

The agreement was made with Landsvirkjun, the National Power Company of Iceland.

The money will be used to support the design, construction and operation of a new 90MWe geothermal power station and its geothermal wells. The power station will be located at Theistareykir, some 30km south-east of Húsavik in the northeast of the country, where nine wells with over 50 MWe capacity have already been drilled and tested.

Vice president Cristian Popa, responsible for EIB-operations EFTA-countries, said, “Iceland is in a very special position when it comes to renewable energy and it’s great to see how Landsvirkjun is making the most of it.

“The EIB is glad that it can support this important energy project, which also highlights how the bank supports the energy sector around Europe.”

Popa added that the Icelandic expertise in this area was state-of-the-art and served as a blue print for geothermal projects around the globe.

The loan is the first EIB project in Iceland since 2011, when it lent €70 million to Landsvirkjun, for the construction of the Budarhals hydropower plant in the lower highlands of southern Iceland on the rivers Tungnaa and Kaldakvisl.

The EIB said these projects were crucial in the fight against climate change through support for renewable energy, which it said was one of the main priorities for the European Investment Bank.

It added that last year, more than a quarter of all EIB-lending supported projects that help safeguard the environment.

Hörður Arnarson, CEO of Landsvirkjun, said, “This is an important milestone for Landsvirkjun and we are grateful for the support the EIB is showing renewable energy in Iceland.

“The EIB has in the past demonstrated its strong support in providing funding for sound and sustainable projects in Europe and we see this agreement as a sign of confidence in our company.”

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