Finland’s and Estonia’s electricity transmission system operators say that Estlink 2, a new submarine cable project linking the two countries, is progressing swiftly and is on track to be commissioned in early 2014.

Fingrid and Elering have signed key contracts for the delivery of the cable and the construction of the converter substations for the 650 MW HVDC link.

The link will play an important role in the development of the electricity market in the Baltic Sea region, according to Fingrid and Elering.

The two companies have selected Nexans Norway AS to supply and install the submarine cable, while Siemens is to build the converter stations in Finland and Estonia. The combined value of the two contracts is €280 million.

The European Commission is to subsidise construction of the link with a €100 million package from the EU’s economic recovery package.

“The EstLink 2 connection is one of the most important infrastructure projects in the region and has positive impact on further electricity market development,” said Taavi Veskimägi, CEO of Elering. “After the commissioning of EstLink 2 in 2014 we will have a more integrated Baltic-Nordic electricity market.”

The overall cost of the project will be €320 million.

“EstLink 2 is a good example of well-organised co-operation between transmission system operators having a same goal – develop a well-functioning electricity market in [the] Baltic-Nordic region, and securing the reliability of local transmission systems,” said Veskimägi.