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State Aid

State aid: Regional aid to Verne Data Centre in Iceland subject to formal investigation

3.11.2010

PR(10)62
Today, the EFTA Surveillance Authority, opened a formal investigation into the Icelandic State's plans to grant regional aid to Verne Holdings ehf. for the construction of a new data centre in south-west Iceland.

 

The Authority, after a preliminary examination, finds that doubts are raised to the state aid compatibility of the notified measures.

Verne invested in two large warehouses on the former NATO base close to the international airport in Keflavik Iceland in early 2008. The company intends to construct the data centre in three phases, the last phase in 2016.

On 1 September 2010 Iceland notified to ESA the State's intention to grant regional aid to Verne for the construction of a data centre. A separate law adopted by the Icelandic Parliament in June 2010, Act No 57/2010, enables the State to enter into an agreement with Verne which would exempt the company from various taxes and fees.

Since work on the project started in February 2008 without a commitment to grant regional aid from the Icelandic government, the Authority finds the need for more information as to whether regional aid is necessary for the completion of the project. The Authority will moreover assess the terms in the power contract with Landsvirkjun and several other agreements entered into between Verne and state controlled entities in order to verify whether the agreements are concluded on market terms.

It is for the national authorities to show the necessity of the aid to ESA and to prove that it does not unduly affect competition. Under the investigation procedure opened today, interested parties will have the opportunity to comment on ESA's decision. The State will have to demonstrate the incentive effect, the proportionality of the intended aid and the instrument's appropriateness to tackle a regional disadvantage.

The decision to open a formal investigation procedure is without prejudice to the final decision of the Auhtority which may conclude that the measures in question are compatible with the EEA Agreement.

The Authority will now call for further comments from the Icelandic authorities and from third parties with an interest in the case. A non-confidential version of the Authority's Decision to open formal investigation will shortly be published on the Authority's website. and in the Official Journal of the European Union.

 

For further information, please contact:

 

Mr. Per Andreas Bjørgan
Competition and State Aid
tel. (+32)(0)2 286 18 36
mob: (+32)(0)477 263 027




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