Elering, an Estonian energy company has been awarded a loan of $43m by The European Investment Bank (EIB).
Once built, the plant will only be operational in emergencies, lowering the cost of the network tariffs in Estonia and could also be used to support Latvia and Lithuania.
Th plant will be based in Kiisa, just under 30km from the Estonian capital Tallin.
In the last 5 years over $1.85bn has been awarded to Estonia by the EIB, with almost one third dedicated to energy projects.Â
Taavi VeskimÃ¤gi, CEO of Elering has said "it is hard to overestimate the role of the Kiisa emergency reserve power plant for Estonian consumers in the event of any kind of electricity system failure. The plant has to be able to compensate for a tripped generator in the country or an interconnection in a matter of minutes in the event of a failure."