Fingrid and Elering have signed an agreement to construct a second direct current link – EstLink 2 – between Finland and Estonia.
The submarine cable, valued at €320m ($455m), will further enhance in expanding the electricity market in the Baltic Sea region.
The EstLink 2 transmission connection will feature a transmission capacity of 650MW, raising the electricity transmission capacity between the countries to 1,000MW.
The Commission of the EU granted an investment subsidy of €100m ($142m) for the project, of which the first installment has been paid.
Fingrid's president and CEO Jukka Ruusunen said the preparatory work to get the construction underway will be completed by December and the actual construction work will start from the beginning of 2011.
The new link is expected to be brought to commercial operation at the beginning of 2014.
Plans for transmission connections from the Baltic countries to Poland and Sweden is under consideration and the submarine cable between Lithuania and Sweden is due to be commissioned in 2016.