The CEO of Landsvirkjun signed a memorandum of understanding on February 23 on behalf of the company, launching negotiations for the sale of Landsvirkjun’s shares in Landsnet to the government. A change in ownership of Landsnet has been underway for some time.
Landsnet operates the Icelandic transmission system and control of power systems. It is owned by four power companies: Landsvirkjun (64.73%), RARIK (22.51%), Orkuveita Reykjavíkur (6.78%) and Orkubú Vestfjarða (5.98%). All parties signed the memorandum of understanding, as did the Minister of Finance and Economic Affairs and the Minister of Tourism, Industry and Innovation on behalf of the Government.
The Icelandic Government decided in December 2018 to start discussions to ensure the direct state ownership of Landsnet and established a preparatory work group. The memorandum of understanding signed today states that the parties agree on the importance of securing that that the change in ownership will not negatively affect the financial strength of the sellers, the buyer, or the interests of Landsnet. The parties’ goal is to reach an agreement before the end of the year.
“We at Landsvirkjun think it is sensible to fully distinguish between owners of the electricity transmission system on the one hand and power generation on the other hand, even though it is not required by law,” says Hörður Arnarson, CEO of Landsvirkjun. “In the long run, it is not optimal that Landsnet is owned by power generators and distributors. One argument is that the independence of the transmission system will enhance equality between parties in the market. We enter the negotiations optimistic and see the decision as a positive step for the ongoing development of the electrical power system in Iceland.”