Foreign Energy Concern Set to Buy Nearly All of Icelandic Energy Company - The Reykjavik Grapevine

Foreign Energy Concern Set to Buy Nearly All of Icelandic Energy Company

Published May 17, 2010

The Canadian energy company Magma Energy will soon own 98% of HS Orka, an Icelandic power company. Leftist-Green MP Ögmundur Jónasson believes the government ought to step in and prevent the sale from happening.

In a nutshell, Magma Energy already owns 46% of HS Orka, a measure approved by the conservative-led city council last autumn. Now Magma is set to buy Icelandic energy comapny Geysir Green Energy’s 52% stake in HS Orka. This effectively puts Iceland’s third largest power company in the hands of a foreign company, with very few returns remaining in the country.

Leftist-Green MP Ögmundur Jónasson believes the government ought to step in and prevent the sale from happening, as otherwise the party has failed to defend the natural resources of this country. He told RÚV that the most important task for the government right now is not to succumb to the temptation to sell our natural resources in difficult economic times. He has called for a special parliamentary meeting on the matter this week.

Minister of Industry Katrín Júlíusdóttir has no comment.

Prior to the buyout, HS Orka was owned for the most part by municipalities in the region. The economic collapse of autumn 2008 has attracted many investors to Iceland, and the approval of the sale of part of HS Orka last fall was conducted before a full gallery of spectators (as seen in the above photo) in city hall.

At the time of the sale, Magma Energy CEO Ross Beaty told the Grapvine, “I went to Iceland earlier this year and looked at opportunities and it seemed that HS Orka could benefit from capital infusion, reorganisation of its shareholding to stronger positions and it looked like there was an opportunity to do something that would help us and help HS Orka and, in the big picture, help the country of Iceland.”

With only 2% of HS Orka’s revenues now remaining in the country, it is hard to imagine just how Magma Energy is helping Iceland.

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