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EIB lends €270m for renewable energy projects in Pakistan and Iceland

The European Investment Bank (EIB) will provide €100 million to Pakistan and another €170m to Iceland, to finance renewable energy projects.

In Pakistan, the EIB will part-finance investments with the Asian Development Bank (ADB) to support a series of renewable energy projects that will contribute to the mitigation of climate change, a core objective of the European Union’s mandate for lending in Asia. The investments are part of a multi-year programme to develop the renewable energy sector in Pakistan set up by the country’s government, for a total of US$2.2 billion.

The programme has US$510m of financial support from the ADB and is backed by technical assistance from ADB, the World Bank and bilateral development agencies (USAID and Germany’s GTZ). This is the EIB’s fifth lending operation in Pakistan, where it started operations in 1993.

The loan “is definitely a timely and visible contribution to the EU policy aimed at consolidating democracy in Pakistan and supporting social and economic development in the country,” says Carlos da Silva Costa of EIB. “It also constitutes the first mutual reliance arrangement between the ADB and EIB.”

In Iceland, the EIB loan to Orkuveita Reykjavikur (Reykjavik Energy) will expand the company’s geothermal power capacity by 90 at the Hellisheidi complex and construction of a new 90 MW geothermal power plant at Hverahlíð. These new power units will meet increasing demand for electricity in the export-orientated industrial sectors, and supports EU policy to promote the use of renewable energy globally and to fight climate change.

“We are pleased to support this environmentally-friendly technology for a project contributing to economic recovery in Iceland and to continue co-operation with our established partner,” says Eva Srejber of EIB. Orkuveita Reykjavikur is Iceland’s largest multi-utility provider, delivering electricity and hot water from geothermal sources, to two-thirds of the country’s population .

Last week, the EIB lent €80m to GEMASOLAR 2006 SAU to finance construction and commissioning of a concentrated solar power plant in Fuentes de Andalucía, Spain.

The European Investment Bank is the EU’s long-term financing institution promoting European objectives. Set up in 1957, the EIB operates in the 27 EU Member States and 130 other countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific.

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