A new subsidiary for Iceland’s National Power Company, Landsvirkjun Power (LP), has been established with the purpose of participating in foreign energy projects, either through know-how or investments.
According to National Power Company CEO Fridrik Sophusson, the establishment of LP coincides fully with the current government agreement, made when the Independence Party and the Social Democrats took over as the coalition administration for Iceland last May, Morgunbladid reports.
Sophusson said the agreement states that energy companies should cooperate with private parties to expand into foreign energy markets. “The National Power Company will have full ownership of the new company […], but LP can participate in projects in cooperation with other parties through subsidiaries like Hydrocraft Invest, in which LP holds a 50 percent stake and Landsbanki Bank the other 50 percent.”
“Risk is always involved in business operations, but LP’s operations will not be any riskier than in comparable companies. The idea is not to participate in extensive investments; we don’t have the financial ability for that,” said managing director of the National Power Company Bjarni Bjarnason, who will become LP’s CEO.
Minister of Industry Össur Skarphédinsson said the establishment of LP is a very positive step. “This coincides completely with the government’s policy and I celebrate this decision made by the National Power Company. I have always said that the company should focus more on expanding into foreign energy markets because it has extensive experience which should be used on foreign ground.”
LP will begin operations on January 1, 2008. Between 30 and 40 people will work for the new company and its capital will be ISK 8 billion (USD 129 million, EUR 89 million).