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The European Investment Bank (EIB) is providing a EUR 260 million loan to the energy company Fortum Värme for the design, construction and operation of a new biomass combined heat and power (CHP) plant. The plant will be located in Stockholm and deliver heat to the existing district heating system in Sweden’s capital and electricity to the public grid.

The EIB is financing also the necessary biomass handling facilities and the upgrading of port facilities related to the plant. The advanced boiler technique will allow for application of a full range of solid biofuels and reduce the use of fossil fuels significantly. Through the use of regional forest residues, it will support the sustainable management of EU forests. The high-efficiency CHP will provide for significant primary energy savings when compared to a separate generation of heat and electricity from the same fuel. Fortum Värme’s plant will have a production capacity of 280 MW heat and 130 MW electricity.

The construction of the new plant is planned to be finalised by 2016. The project is expected to create 35 new permanent posts for the operation and maintenance of the CHP plants, including on-site biomass treatment.

Jonathan Taylor, EIB Vice-President responsible for lending in Sweden, said, “The EIB strongly supports the increased use of renewable energy and fosters energy efficiency. We therefore particularly welcome this agreement with Fortum Värme, as the new biomass plant will enable significant energy savings and contribute to climate neutral production of district heating in Stockholm. The project will also, importantly, contribute to growth and employment in the European Union by supporting the forest management and biomass equipment industry in Europe”. 

Anders Egelrud, CEO of Fortum Värme, said, “We are contributing to a sustainable city by building the future energy system for Stockholm. Our new CHP is beneficial for the whole of Europe as the renewable electricity produced will reduce electricity production based on fossil fuels in continental Europe. When the plant is in operation, 90% of our heat and electricity production will be based on renewable and recovered energy. By 2030 at the latest, this ratio is expected to be 100%. We are also very pleased with this EIB loan, which forms a sound basis for our efforts to meet our shareholders’ desire to ensure standalone financing of Fortum Värme before 1 January 2016”.

This project is a continuation of the EIB’s successful cooperation with Fortum Corporation. Including the current operation, the Bank has provided four loans to the group to support investments in the modernisation of Stockholm’s heating and power supply networks as well as upgrading the electricity distribution networks in Sweden.

In 2013 EIB financing in Sweden amounted to EUR 1.57 billion. Compared to EIB financing in 2012, which amounted to EUR 1.13 billion, this represents an increase of almost 40%. The Bank’s lending in 2013 focused on projects promoting research, development and innovation (RDI) in the industrial sector as well as on sustainable transport. For more information on EIB activity in Sweden in 2013 click here.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

AB Fortum Värme Holding samägt med Stockholms stad (publ) (Fortum Värme) is the leading provider of district heating, cooling and gas in the greater Stockholm area. The company has played a key role in the establishment of Stockholm as one of the cleanest capitals in the world. Between 2010 and 2015. the company will invest SEK 7bn in combined heat and power production. The company has 9500 district heating and district cooling customers.

Fortum Värme is jointly owned by Fortum Corporation (90.1% of the shares and 50.1% of the votes) and the City of Stockholm (9.9% of the shares and 49.9 % of the votes). During 2013 the owners agreed on a new shareholder agreement, where the ownership will be a pure 50/50 arrangement as from 1 January 2016, after which the owners have also agreed that Fortum Värme should have standalone financing without support from the owners. Since April 2014, Fortum Värme has had a credit rating of BBB+ with a stable outlook (Standard & Poor’s).

Fortum Värme

Kerstin Levin, Chief Financial Officer (CFO), Fortum Värme; This email address is being protected from spambots. You need JavaScript enabled to view it., +46 703445265