A major power transmission link between Finland and Estonia was formally launched in April 2005 at a signing ceremony between representatives of ABB and Nordic Energy Link in the Estonian capital Tallinn.

The European Commission approved Estlink on April 27, 2005, granting an exemption that will charge Nordic Energy Link for the cable's construction, rather than adding the costs to the domestic tariffs of the main grids. Prior to that, electricity market regulators in Estonia and Finland approved the exemption.

Estlink, the first interconnection between the Baltics and Nordic electricity markets, forms part of the European Union's plans to expand interconnections in Europe.

Estlink is about 100 km (62 miles) long, 75 km (46.6 miles) of which is underwater cable and the rest of which is underground cable — 9 km (5.6 miles) in Estonia and 20 km (12.4 miles) in Finland. The project will use ABB's high-voltage direct current (HVDC) Light technology to link the 330-kV Harku Substation in Estonia and the 400-kV Espoo Substation in Finland. ABB is committed to delivering the high-end technology in less than 20 months. The project is due to be completed by the end of 2006.

Estlink, which is worth US$110 million for ABB, is designed to supply the Nordic electricity market with electricity generated in the Baltics. An estimated 2 TWh of electricity will be transported via the cable.

The main importance of the project lies in the improved security of electricity supply in the Baltic states. Estlink allows for electricity transit and provides an alternative electricity purchase channel to cover potential deficits in generating capacity.

The partners in the Estlink project are Baltic power utilities Eesti Energia, Latvenergo and Lietuvos Energija, as well as Finland power utilities Pohjolan Voima and Helsinkin Energia.