SEV, the Faroe Islands utility, has secured funds from the Nordic Investment Bank to build a pumped hydroelectricity storage facility on the island of Streymoy. The Mýruverkið II project, valued at DKK 1.3 billion ($174 million), is expected to come online in the period 2027-28.
SEV, the Faroese electricity company, has secured a 15-year loan from the Nordic Investment Bank (NIB), so it can go ahead with plans to build a storage facility of pumped hydroelectricity in Vestmanna, which is a town on the island of Streymoy.
The DKK 250 million (€33.60 million) loan will co-finance a system consisting of mountain caverns and a tunnel connecting the existing upper Myrarnar reservoir and the lower Heygadalur water reservoir via eight water pumps. a total capacity of 70 MW, the NIB said. It will push water upwards using excess wind and solar power, through four turbines with a combined capacity of 40MW when needed, he added.
“The agreement with NIB is just one of many loan agreements, as SEV has entered into other loan agreements with financial institutions and insurance companies located in the Faroe Islands, the Nordic countries and the United States,” SEV said in a press release. “An agreement for DKK 650 million of available credit is part of the financing. This agreement is an association between Nordic and Faroese financial companies, explicitly Skandinaviska Enskilda Banken and Betri Banki, BankNordik and Lív. Some funding is also borrowed from some US health insurance companies.
The DKK 1.3 billion Mýruverkið II project is expected to come online in the period 2027-28. However, SEV still needs to obtain significant approvals, including planning permission, clearance from conservation authorities and approvals for the environmental impact of the pumped storage system.
SEV currently serves 29 municipalities in the Faroe Islands. It owns the archipelago’s electricity network and 98% of its total installed electricity production capacity, including a 261 kW solar power plant inaugurated in December 2019.
“The Vestmanna pumped storage system is the largest project SEV has ever undertaken, and it is also one of the most impressive projects the Faroe Islands have seen,” the company said.
According to the International Renewable Energy Agency, the Faroe Islands had approximately 59 MW of renewable energy installed at the end of 2021. The islands have four diesel power stations totaling 100 MW, six hydropower stations with a combined capacity of 37 MW and several wind power plants. power plants equivalent to 18 MW.
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