Swedish energy firm Fortum Värme has secured a €260m loan for the construction of a new combined heat and power biomass plant in Stockholm, from the European Investment Bank (EIB).
Fortum Värme will utilise the loan to design, construct and operate the plant, which will have a production capacity of 280MW heat and 130MW electricity.
EIB vice-president responsible for lending in Sweden Jonathan Taylor said EIB supports renewable energy use and raises energy efficiency.
Taylor said, "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."
The facility will not only provide heat to Stockholm's existing district heating system but also provide power to the city's public grid.
Additional financing is also provided by EBI for the biomass handling facilities and the refurbishment of port facilities related to the plant.
Fortum Värme chief executive Anders Egelrud said Fortum Värme is contributing to a sustainable Stockholm by developing the future energy system.
Egelrud said, "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%.
"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."
With construction scheduled to be completed by 2016, the facility will create 35 new permanent jobs for operation and maintenance.
Image: Illustration of biomass plant in the city of Stockholm. Photo: courtesy of European Investment Bank/Fortum.