The interconnector linking Norway and Germany will be supported by a €100 million financing agreement backed by EFSI
The EIB signed a €100 million financing agreement with TenneT Holding B.V. The agreement with the TSO will support the construction of an electricity interconnector between Norway and Germany, known as the NordLink interconnector.
The €100 million hybrid capital, purchased by the EIB, is issued under TenneT’s hybrid Securities programme launched on 12 April 2017, and is rated A3/A-. This financing is supported by the European Fund for Strategic Investments (EFSI), launched by the EIB and the EC to boost investments in such projects of European importance.
In 2017, the extension and strengthening of the EFSI until 2020, commonly known as EFSI 2.0, was discussed and agreed upon by the EP and the Member States. Beyond 2020, it is envisioned EFSI will be a main pillar under the new InvestEU Programme – part of a major EU fund restructuring (see Trending Topic of 08 June 2018: “EC proposes restructuring of energy funds and increased funding under new EU budget”).
The NordLink interconnector is being developed by the Norwegian TSO Statnett and TenneT-owned DC Nordseekabel, each with a 50% stake. The agreement will go towards the financing of the construction of the German part of the project, which is carried out by DC Nordseekabel and the German bank KfW.
The interconnector, which is a Project of Common Interest (PCI), will be the first HVDC cable to directly connect German and Norwegian electricity grids and is designed to have a capacity of 1,4 GW and to be longer than 620 kilometres.
Earlier in August 2018, the German Federal Minister for Economic Affairs and Energy, Peter Altmaier, presented a new Power Grid Action Plan to the Bundesnetzagentur, Germany’s network regulator. The plan aims to accelerate the expansion and strengthening of the German power grid, including the construction of four HVDC transmission corridors connecting the north federal states and their neighbouring countries to the major industrial centres in the west and south of Germany.
According to Minister Altmaier, to successfully proceed with the energy transition, known as Energiewende, Germany needs modern and strengthened networks combined with further expansion of the RES generation. The second part of Altmaier’s grid expansion ambition consists ins the planned amendments to Germany’s Grid Expansion Acceleration Act, which are to be released in autumn 2018.
While the Power Grid Action Plan aims to enhance the operation of existing power lines and ease the planning process for new grid infrastructure, the amendments to the grid law are foreseen to limit the influence of German federal states in the grid planning process and approval of grid projects of federal importance.
Both the NordLink interconnector and the four prioritised internal HVDC transmission corridors are expected to increase the interconnection of the German states and resolve some of the grid congestion, which creates a north-south divide and hinders the more efficient and wide-spread integration of RES.