A sizeable minority within the cabinet of the Reykjavik city council intends to request that the details of Reykjavik Energy’s dealings with Canada’s Magma Energy over the sale of its stake in HS Orka be made public.
The board of Reykjavik Energy yesterday voted to accept Magma’s offer to buy 16.58 percent of HS Orka. The company will also purchase a 15 percent share from the Town of Hafnarfjordur.
The sale of Icelandic energy resources to foreigners has never happened before and has caused considerable controversy; especially as Reykjavik Energy is a publicly owned company. Some argue that foreign investment will bring new opportunities, experience and credibility to the Iceland’s huge renewables market, while others feel that energy independence is paramount and that public assets should not be sold to private firms – especially as Iceland is already a world leader and expert nation in renewable energy production.
The chairman of the Reykjanesbaer town council says he does not see how Magma Energy can pull out of the HS Orka purchase at this stage and added the town would consider suing the State if it interferes to cancel the deal.
The Financial Times reported this weekend that Ross Beaty, the president of Canada’s Magma Energy, is threatening to delay or even cancel buying HS Orka due to the political storm it is causing in Iceland. The government has stated it is determined to reverse the widespread privatisation of the energy sector.
Bodvar Jonsson, chariman of the Reykjanesbaer council, says the deal is important for his community and that it needs to go ahead. Under the deal Magma would buy the bonds that the local government holds.