NIB funds £84m for SCA’s softwood kraft pulp mill expansion in Sweden


The Nordic Investment Bank (NIB) has agreed to provide SEK1bn (£84m) in financing to Swedish forest company Svenska Cellulosa Aktiebolaget SCA to expand its production capability at its softwood kraft pulp mill in Sweden.

The loan, which has a maturity of 10 years, will be used to expand the production capacity of SCA Östrand plant in Timrå, Sweden from the current 430,000 tonnes to 900,000 tonnes.

Upon completion of the expansion, the Östrand plant will become one of the world’s largest production line for bleached kraft pulp.

NIB said that the use of the work force at the plant will remain almost the same, implying a doubling of labour productivity at the facility, measured in output quantities.

The pulping process will see the considerable increase of bi-products, annually yielding 17,000 tonnes of talloil and turpentine such as for production of biofuels and approximately 500GWh of power, steam and district heat for external use.

Separately, NIB and Norrvatten, Swedish water services firm, have agreed on an uncommitted loan facility of SEK500m (£42m) to fund fresh water infrastructure renovations in Stockholm.

The NIB funding will be used for the refurbishment of the Görväln water treatment plant (WTP), extension and renovation of water pipelines and external facilities in the northeast of Stockholm.

The renovation of the Görväln WTP will increase its production capacity by 10% by 2021. At present, the facility supplies water for a population of 600,000, and the revamp will allow the Swedish water services firm to supply up to 740,000 inhabitants by 2023.

The latest 30-year framework loan agreement represents the second loan facility agreement between NIB and Norrvatten. The first loan agreement was signed in 2015 to facilitate its infrastructure investment programme.

NIB president and CEO Henrik Normann said: “This agreement supports Norrvatten’s efforts to secure a sufficient fresh water production in the face of challenges related to population growth and climate change.”

The latest improvement works will allow the Swedish water services firm to maintain its water treatment operations, ensuring quality drinking water supply.

Founded in 1926, Norrvatten currently includes 14 municipalities located in the northern part of Stockholm region.


Image: SCA Östrand plant. Photo: courtesy of SCA/Nordic Investment Bank.

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