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State Aid

PR(09)62: Tax measures concerning the construction of an aluminium plant at Helguvík approved by the Authority

23.7.2009

The Authority today decided not to raise objections to aid measures which the Icelandic authorities intend to grant in respect of a planned aluminium smelter at Helguvík, Iceland.

The Authority today decided not to raise objections to aid measures which the Icelandic authorities intend to grant in respect of a planned aluminium smelter at Helguvík, Iceland.

The Icelandic Government notified the Authority of its intention to enter into an Investment Agreement on the basis of Act No 51/2009, consisting of tax and fee concessions to Norðurál Helguvík ehf. in order to facilitate the investment in a new aluminium smelter. The smelter is to be constructed at Helguvík, within the municipalities of Reykjanesbær and Garður, close to the international airport at Keflavík.

The project will be undertaken by Norðurál Helguvík ehf., a subsidiary of the American company Century Aluminium. The plan is to construct an aluminium smelter with an annual production capacity of 360,000 tonnes in four stages between 2009 and 2015. When the smelter reaches full output, approximately 540 persons will be directly employed.

The Authority has deemed the state aid, granted via the proposed tax and fee concecessions, to be investment aid, which can be approved as regional aid in accordance with the Authority's guidelines. The amount granted will be within the maximum aid ceiling for large investment projects according to the guidelines, approximately Euro 70 million. The Authority considers the aid to be necessary for the project to be realised and recognises the positive effects of the investement for the region. Against this background the Authority has decided not to raise objections to the notified measures.

The electricity for the aluminium smelter will be supplied by geothermal power from plants to be constructed by two power companies; the publicly owned Orkuveita Reykjavíkur and the privately owned HS Orka hf. The Authority considers that the power contracts do not involve State aid. 

For further information, please contact:

Per Andreas Bjørgan
Director, Competition and State Aid Directorate
tel. (+32)(0)2 286 18 36,or

 

Brussels, 23 July 2009





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