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Landsvirkjun Power ehf.

December 18, 2007

The object of the company is the sale of consultancy services to third parties and to undertake on its own, or to manage, general research, power plant preparations and construction for LV and, as applicable, for the subsidiaries and partners of LP and LV. The company is intended to take part in any form of investments in the field of energy, including direct or indirect investments in power plants and electricity projects.

Board of Directors and CEO of LP
The Board of Directors consists of Fridrik Sophusson, Chairman; Örn Marinósson; Einar Kristjánsson. Furthermore, Bjarni Bjarnason, who has been the head of the Energy Division of LV for past years, has been appointed CEO as of 1 January 2008.

The Engineering and Construction Division of LV will be transferred to LP
As of 1 January 2008, the engineering and construction division of LV will be discontinued, and the approximately 40 employees working in the division will, for the most part, be transferred to the new company, together with the projects for which they are responsible. Thus, LP will be responsible for the final stages of the work on the Kárahnjúkar hydroelectric plant for LV and will manage preparations for the power stations at the lower sections of Thjórsá and geothermal projects in north-east Iceland.

LP will work on the power stations for LV
To make it absolutely clear, the new power stations to be built, e.g. in Thjórsá, will be the property and the responsibility of LV. The management and supervision performed by LP with respect to research, design and construction of such facilities will be performed as projects for LV in exchange for payment pursuant to agreements reached.

LP share capital amounts to up to ISK 8 billion
The Board of Directors of LV has agreed to deposit up to ISK 8 billion as share capital for LP. As the company is a limited liability company, LV thus limits its risk through the establishment of LP to this amount. The company’s investments will then be financed through loans guaranteed by LP and not LV. Thus, there will be no state guarantees on such loans.

LP’s subsidiaries and affiliated companies
On the establishment of LP, several subsidiaries and affiliated companies will be transferred from LV to LP. These include the subsidiary Íslensk jardhitatækni and the affiliated companies Hecla SAS in France and Sipenco in Switzerland. All these companies have the role of working on projects in the field of energy.

In addition, there is HydroKraft Invest, which is jointly owned by LP and Landsbanki vatnsafl ehf. Up to ISK 5 billion of the ISK 8 billion supplied to LP as share capital is earmarked as share capital in HydroKraft. The company is an investment company that seeks projects in the energy sector, initially focusing on east Europe.


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