European Investment Bank (EIB) has agreed to grant €125m ($142m) in financing to Iceland’s electricity generator Landsvirkjun to fund the development of new geothermal power station.
The funding will also be used by the National Power Company of Iceland to design, construct and operate the 90MWe geothermal power station and its geothermal wells located at Theistareykir, near Húsavik in north-eastern Iceland.
EIB vice-president and management committee member Cristian Popa said: "The EIB is glad that it can support this important energy project, which also highlights how the bank supports the energy sector around Europe.
"The Icelandic expertise in this area is state of the art and serves as a blue print for geothermal projects around the globe."
About nine geothermal wells with over 50MWe capacity have already been drilled and tested at the project location in Húsavik.
Landsvirkjun CEO Hörður Arnarson said: "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."
In May, Landsvirkjun said that construction of Theistareykir geothermal power station has reached major milestones.
The first 45MW phase is of the project is scheduled to be completed in the fall of 2017 followed by the second 45MW phase in 2018.
In 2011, Landsvirkjun received €70m grant from EIB for the construction of the Budarhals hydropower plant in the lower highlands of southern Iceland on the rivers Tungnaa and Kaldakvisl.
Image: Landsvirkjun and EIB officials during loan agreement signing. Photo: courtesy of European Investment Bank.