State power purchase guarantee supports new renewables development in Nordland County

Eolus Vind Norge AS will build a new wind power station at Øyfjell in Vefsn municipality, Nordland County. The generated electricity will be sold to the aluminium producer Alcoa Norway ANS under a long-term contract, for use at the company’s Mosjøen smelting plant. Electricity purchases under the contract are expected to total around 1.2 TWh per year for the next 15 years. GIEK is providing a EUR 256 million (approximately NOK 2.5 billion) state guarantee in respect of Alcoa Norway ANS’s contractual payment obligations.

This is the second renewables project supported by a GIEK guarantee to be realised in northern Norway in recent months. In October 2017, GIEK issued two guarantees for wind power stations at Kvitfjell and Raudfjell in Troms County.

“I am very pleased that the power purchase guarantee scheme is supporting the development of new renewable power production capacity in Nordland County and facilitating the development of Alcoa’s aluminium plant at Mosjøen. This deal is important for business development in the region, and illustrates the power of closer cooperation between industry, banks and the State,” says Minister of Trade and Industry Torbjørn Røe Isaksen.

“Our guarantees are provided on market terms,” emphasises GIEK CEO Wenche Nistad. “We foster confidence between long-term commercial partners. I am pleased that we can work together to support the green shift and protect important industrial jobs in Norway,” she adds.

Eolus Vind Norge AS and Alcoa Norway ANS have also issued separate press releases.

About the power purchase guarantee scheme

The power purchase guarantee scheme was approved by the Storting (the Norwegian parliament) in 2009 to enable GIEK to issue guarantees to power sellers and financial institutions when industrial undertakings in energy-intensive sectors conclude long-term electricity contracts. The scheme has a limit of NOK 20 billion, and is available to undertakings in the timber, wood processing, chemical products and metal production sectors.