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    NIB Invests in Finnish Energy Efficiency

    Stockholm (NordSIP) – According to the International Energy Agency (IEA), global CO2 emissions from energy combustion and industrial processes reached 36.3 gigatonnes (Gt) in 2021, their highest-ever yearly level so far, equivalent to a 6% annual increase. The main driver of this increase was electricity and heat production, emissions from which rose by more than 900 Mt, and accounting for 46% of the global increase in emissions during that year. At the same time, CO2 emissions in the buildings sector rose by 165Mt in the same period.

    In a separate report, the IEA warns that the operation of buildings accounted for 30% of global final energy consumption and 27% of total energy sector emissions in the same year. Of this, 8% was direct emissions in buildings and 19% was indirect emissions from the production of electricity and heat used in buildings.

    NIB Financing

    Decreasing CO2 emissions from electricity, heating and buildings is an important channel through which to pursue Net Zero Emissions by 2050 Scenario, consistent with limiting the global temperature rise to 1.5°C. Regional development and investment banks are particularly well-placed to address these concerns. In this spirit, the NIB announced it had signed a 10-year €12 million loan with the Finnish energy company Leppäkoski Group Oy on January 13th, 2023.

    The loan will finance investments in electricity distribution and the district heating network, including investments for the recovery of waste heat, in the Pirkanmaa area in Finland. A major part of the electricity network investment is to replace the overhead lines with underground cables which significantly improves the security of supply and is expected to reduce weather-induced damage to the network.

    “With this loan, we can support investments that increase the security of supply and respond to the growing electricity and district heating demand. In these times, investments in the energy sector are vital, and NIB can offer long-term funding that complements commercial bank financing,” says André Küüsvek, NIB President and CEO.

    Eight impact indicators have been associated with this project. The NIB will keep a close eye on two capex measures (“Capex EUR million electricity distribution network” and “Capex EUR million, district heating network”), two measures of energy generation (“Energy generation heat pump Nokia, MWh/a” and “Energy generation heat recovery system Parkano, MWh/a”) and two indicators of emissions saving (“Estimated emission savings heat pump Nokia, tCO2e” and “Estimated emission savings heat recovery system Parkano, tCO2e”). The impact of the loan will also be assessed via the “increase in cabling rate, low and high voltage network” and by the “number of substation upgrades”.

     

     

    Image courtesy of Clairewych via Pixabay
    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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