Brussels, 22/11/2010 (Agence Europe) - Energy security in the Baltic states will improve greatly thanks to a 650 MW power cable linking Estonia and Finland to be built with European Investment Bank (EIB) support. A €75 million loan signed on Monday 22 November with Estonian grid operator Elering will provide part of the financing for the project.
Estlink 2 will connect Estonia and Finland by an undersea cable and will also include onshore converter stations and other installations. It will almost triple transmission capacity between the two countries and is to be completed by 2014.
With electricity consumption in Estonia increasing by an annual average of 2-3%, ensuring adequate supply is a key priority. This applies also to Latvia and Lithuania. By establishing a higher capacity connection between the Baltic states and Finland and the rest of the Nordic grid, Estlink 2 will lead to less congestion in an existing cable, lower price discrepancies and help ensure supply at peak loads. Estlink 2 is also one of the key projects under the Baltic Energy Market Interconnection Plan (BEMIP) which was launched on the initiative of the EU Commission in 2008. In addition to the EIB loan, financing of the project will be in the form of a European Union grant, a loan from the Nordic Investment Bank and own resources of Elering and Fingrid, the Finnish grid operator. (O.L./transl.rt)