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State Aid

State Aid: Verne data centre must pay back aid granted in breach of EEA rules

4.7.2012

PR(12)43

In a decision adopted by the EFTA Surveillance Authority today, the Icelandic State is asked to recover aid worth more than ISK 220 million[1] from the data centre company Verne. However, a power contract and a lease agreement were found not to include state aid.


The aid was granted when the State sold five buildings at the former military base at Keflavík airport to Verne in 2008, at a price below market value. The difference between the market value and the sales price of the five buildings must be recovered from the company.

Verne has moreover been granted exemptions from property and street construction taxes by the municipality of Reykjanesbær since 2009. The Authority's investigation concludes that these exemptions were incompatible with the EEA Agreement and that this aid must be recovered from Verne.

“When selling real estate, national authorities can exclude the presence of state aid by simple procedures. The market value can be established either on the basis of an unconditional bidding procedure or an independent expert evaluation. The Authority will always ask for recovery of any incompatible aid that has not been notified and has been paid out in breach of the stand still obligation,” Oda Helen Sletnes, president of the EFTA Surveillance Authority, said.

Iceland initially planned to grant aid in the form of various government tax derogations as regional aid for the construction of the data centre. However, the Authority had doubts as to the compatibility of the aid with the EEA Agreement and opened a formal investigation in November 2010. Iceland withdrew the notification concerning these government tax derogations in 2011. Instead, Verne applied, and was granted, tax derogations under the Icelandic Investment Incentives Scheme. The scheme was approved by the Authority in 2010. Individual grants under this scheme are assessed by the Icelandic Authorities, subject to subsequent reporting to ESA. These measures are therefore not subject to the Authority´s decision today.

Of the remaining Verne aid measures to be assessed, the Authority found that a lease of land agreement with the State and a power contract between Verne and the public company Landsvirkjun did not involve state aid.

The power contract provides Verne with 25MW of electricity, in steps, for cooling the planned data centre. The Authority has found that the contract does not entail the granting of state aid since it is concluded on market terms.

Equally, the Authority has decided that the agreement to lease 9.6 hectares of land to Verne was concluded on terms that would be acceptable to a private investor. Thus, it does not entail any state aid.

The recovery ordered today must be carried out within four months and shall bear compound interest from the date the aid was granted, in 2008 and 2009.

The decision will be made available on the Authority's website within one month.

 

For further information, please contact:

 

Mr. Trygve Mellvang-Berg
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187

 

 

 

 

 



[1] Approximately EUR 2.3 million at the time of the transaction in 2008.




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