Anna Ringstrom and Robert Sennerdal

Swedish hygiene and paper firm SCA and Norway’s Statkraft on Friday agreed to join forces to build windfarms in northern Sweden and explore a possible expansion of hydropower

STOCKHOLM, Sweden; September 17, 2007.- The two firms also signed a ten-year deal under which Statkraft would supply electricity to SCA.

State-controlled Statkraft will provide the 16 billion crown (US$2.39 billion) funding while SCA, Europe’s largest maker of corrugated packaging and hygiene products, would grant land for the seven farms in Sweden’s Vasternorrland and Jamtland.

In a statement, the companies said they were aiming for the farms to produce 2,800 GWh of wind power electricity per year, and that the sites would now be subject to environmental assessments and planning.

“We have made an inventory of our 2-1/2 million hectares of forest land in northern Sweden in order to find locations with favourable conditions for wind power production,” said Kenneth Eriksson, President of SCA Forest Products, in the statement.

SCA said there were no conflicts with other stakeholders at the designated forest sites.

“Statkraft’s goal is to increase production of renewable energy. The agreement with SCA is therefore a major step in the right direction and entirely in line with our strategy,” Statkraft said.

SCA’s acting Chief Executive Lennart Persson told a news conference ensuring long-term electricity supply and contributing to environmental friendly energy production were the reasons for SCA to enter the project.

“The basic industries have been trying to find new kinds of energy and increased energy supply to the country. We want to ensure our electricity supplies and it is today important to be able to do that in an environmentally friendly way,” he said.

In a separate statement the firms said they had signed a 10-year deal for Statkraft to supply 500 GWh of power annually to SCA’s Swedish activity within the forest industry, a deal that SCA said to have “competitive prices”.

“This agreement is an important step towards a well functioning Nordic market for long term contracts with the industry,” Statkraft said.

The firms said the joint venture would also study the feasibility of expanding hydropower in the regions Jamtland, Vasternorrland and Vasterbotten, in four waterways.

In a separate statement, SCA said it would invest 800 million crowns in its Ortviken paper mill in northern Sweden to increase production, an investment it expects to complete by spring 2009.

The mill produces paper for newspapers and magazines and uses 1.8 TWh of electricity per year. SCA’s Swedish industrial operations consume nearly 3 TWh per year.

Persson said SCA’s earnings would not be affected by the construction of the windfarms.

“It can be 10 years before SCA makes money on this,” he said.

(Reuters)

 

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