Reykjavík Energy Invest Appeals to Foreign Investors Skip to content

Reykjavík Energy Invest Appeals to Foreign Investors

Daughter company of Reykjavík Energy (OR), Reykjavík Energy Invest (REI), which plans to become a world leader in geothermal energy investments, announced yesterday that REI will not rely on funding from OR in the future and instead appeal to foreign investors.

Chairman of the board of OR and REI Kjartan Magnússon revealed this policy in a meeting in Reykjavík City Council yesterday, adding that REI would continue to work on ongoing projects, including projects in Djibouti and Yemen, but with minimum risk, Morgunbladid reports.

According to Fréttabladid, the agreement REI made with the Djibouti government includes that REI will undertake a detailed feasibility study on the harnessing of geothermal energy in the country.

The total cost of the project is estimated at ISK 1.5 billion (USD 20 million, EUR 13 million) and REI is committed to provide ISK 300 million (USD 4 million, EUR 3 million) towards that amount.

Magnússon is hoping that IFC, the investment fund of the World Bank, and the European Investment Bank (EIB) will fund the rest. “The prerequisite for this project is that these funds cover the largest part of the cost.”

Magnússon said he is expecting an answer from the two banks within a few weeks and if they green-light the funding, the feasibility study could begin at the end of this year.

If the feasibility study delivers positive results, REI plans to organize the construction of a 100-megawatt power plant in Djibouti, which would cost about ISK 26 billion (USD 349 million, EUR 221 million). REI will not cover that cost. “If the project goes that far, we will look for interested investors,” Magnússon said.

After the merger between REI and Geysir Green Energy (GGE) was aborted last year, the owners of OR agreed in a meeting in February that REI would be in 100 percent ownership of OR. OR is publicly owned by Reykjavík City.

Click here to read more about REI, which has caused heated debates in Reykjavík City Council.

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