The plant is being constructed with an installed capacity of 22.5MW. It includes constructing a 5.5km tunnel that directs water to three 7.5 MW turbines in an underground power station.
Supporting infrastructure for the project will include a 60 kV overhead transmission line besides a road and a small harbor.
Water discharge from the two natural glacial lakes will power the plant that is expected to be fully operational in September 2013. However, the first turbine will be commissioned by November 2012.
"This project is of high importance for Greenland as the island is reducing its dependence on energy production from fossil fuels," said NIB President and CEO Henrik Normann.
NIB has awarded the loan under a 15-year agreement.
