The European Investment Bank finances the construction of a weatherproof network
The European Investment Bank (EIB) has granted a loan of EUR 100 million for Caruna's weatherproof network construction projects. The loan period is 12 years, and it will be drawn during 2019.
“We are constructing the smart electricity network of the future in Finland. The total length of our electricity network is almost 86,000 kilometres, which means you could run the cables from the very north of Finland to the south and back about 37 times. The loan granted by the EIB enables us to ensure the progress of construction projects and a reliable network of the future for homes, municipalities, and businesses,” says Jyrki Tammivuori, CFO and deputy CEO of Caruna.
The EIB borrows money on capital markets and lends it to projects that support EU objectives. About 90% of loans are made within the EU. The EIB's loan to Caruna is part of the EIB's climate finance investments.
The Electricity Market Act requires that by 2028 power cuts cannot last more than 6 hours in urban areas and 36 hours in rural areas. The loan granted by the EIB will be used in its entirety for constructing a weatherproof network. The goal is to replace about 9,000 km of medium- and low-voltage overhead cable network with an underground cable network in southwestern and northern Finland.
The construction project will also have a major regional impact on employment, and the proportion of work done by local businesses is about half of the value of the investments.
The EIB will monitor the progress of Caruna's project according to its lending policy. The interest of the loan will be determined when the loan is withdrawn. The first loan from the EIB, in the amount of EUR 200 million, was granted to Caruna on 11 January 2017.
Standard & Poor's has assigned Caruna a long-term corporate credit rating of BBB+.