The Nordic Investment Bank (NIB) has entered into a loan agreement with Helgeland Veiutvikling to fund a new tunnel in Helgeland in northern Norway.

The €41.5m, 17-year-maturity loan will finance the construction of the 35km-long road, comprising a road tunnel of 10.7km, linking the E6 motorway with the coastal area.

In addition to replacing county road 78, which is frequently exposed to bad weather, the new stretch will cut down driving distances significantly.

The road will also improve competitiveness for the regional fishing, petroleum and dairy industries.

"The €41.5m, 17-year-maturity loan will finance the construction of the 35km-long road, comprising a road tunnel of 10.7km, linking the E6 motorway with the coastal area."

NIB president and CEO Henrik Normann said: "NIB’s loan to Helgeland Veiutvikling ensures an important boost that links Helgeland together, as good infrastructure is essential for dynamic countryside development."

Helgeland Veiutvikling is a regional non-profit, special purpose vehicle (SPV) owned by municipalities in Helgeland, Nordland County, and local banks, which has been established to fund road projects in the region and collect tolls.

NIB is an international financial institution owned by eight member countries, Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden, and provides finances for private and public projects in and outside the member countries.

Earlier this month, NIB signed a €10m loan agreement with the city of Rovaniemi in northern Finland for an investment programme in local road infrastructure.

To be implemented between 2012 and 2015, the investment programme will renovate streets and streetlights in the city.

It will be focused on streets adjacent to Finland’s national road 4 (part of the European route E75) that passes through the city.