Saving Iceland

Iceland Review

The required return on investment of the hydroelectric power plant at Kárahnjúkar was too low said Ágúst Gudmundsson, chairman of Bakkavör on the current affairs program Kastljós (Spotlight) Tuesday, according to the Icelandic Broadcasting Service, RÚV. “I would have preferred that the money had been spent in a different way,” he said. Read More

On 5 January Icelandic State TV host Kristján Kristjánsson interviewed Damon Albarn in the news programme Kastljos. The following night Kristjánsson interviewed the Minister of Industry Valgerður Sverrisdóttir. Below, for comparison, are the transcripts of both interviews and an analysis of the contents.

Intro: Announcer points out that Damon Albarn “was a pop star in the late 1990s”, and will be playing a concert with Björk on January 7. (A curious introduction, as Damon Albarn’s band Gorillaz was both one of the best-selling and most critically acclaimed bands of 2005.)

Kristján Kristjánsson: Are you very much involved in these issues, nature conservatism [sic]? Read More

Josie Demuth: What, for you, makes Icelandic nature so special that you want to stop it’s destruction and participate in this concert?

Björk: It is the largest untouched area in Europe and I feel it is not only my duty to speak out as an Icelander but as a European. The situation has reached a cross roads, Iceland’s economy which was 70 per cent fish went down, so what instead? The attention went from the sea to the land. Fifteen years ago they stopped building a dam in the 1970s because people spoke out and there were artistic protests. But now in 2005 there is this industrial revolution and this way of thinking to sacrifice nature for progress. They are not long term benefits and we can do so much more with nature. We can work with nature, for example, hotels have been put up all over Iceland, and there are tourist centres to tell tourists about the nature. We will not be able to rewind this natural destruction and as I’ve travelled I’ve begun to realise that this is not a modern way of thinking. 50 years ago were independent but what are we gonna do in 100 years now? We are not making progress with this. Read More

“It’s just as if they wanted to ban a religion”
.Icelandic government faces difficult criticism from Left-Greens over heavy-industry policy.

Yesterday MP’s of the Left Green Party criticised severely the government’s aluminium policy, saying that Stalin himself couldn’t have done better in creating a mass-production industrial hell and likened Landsvirkjun, the National Power Company, to the Fenrir of Iceland (Fenrir, in Norse mythology, is a gigantic and terrible wolf that according to a prophecy will be responsible for the destruction of the earth).

In his reply the Prime Minister, Mr. Asgrimsson, implied that opposing the destruction of nature for multinational aluminium corporations amounted to “wanting to ban a religion”.

Mr. Ásgrímsson’s answer may explain why most MP’s and ministers don’t listen to scientists’ and other professionals’ warnings and ignore the outcries of people who are losing their jobs and companies which are going bankrupt as a result of the unhealthy expansion of the small Icelandic economy, directly caused by the gargantuan Kárahnjúkar project.

But now we know, it’s a question of faith!

 

On Tuesday the 17/09/2005 the Students Union of the University of Sussex held their annual freshers fair, where new students are given freebies that no-one needs in exchange for custom. During this event, about 6 students dressed in reindeer-like costumes merrily surrounded the Barclaycard stall. Read More

Iceland Review
08/18/2005

In its Tuesday daily bulletin, KB-bank says that the benefit that Iceland derives from aluminium smelters is small. The bank supports this view by claiming that the electricity is sold at close to cost and the rate of return for hydroelectric dams is low. It also says that the economical impact is overstated in the local discourse.

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In the 1930s, dust storms swept the southern plains of the United States. The “Black Blizzards,” as they were called, had come about because of overfarming, which had caused the topsoil to wear thin and become dust. Crops failed, and as the banks that held the mortgages realised they would not be getting returns on their interest, farmers were run off of their land. Their plight is immortalised in the songs of Woody Guthrie and John Steinbeck’s book “The Grapes of Wrath”, which went on to become a Hollywood film starring Henry Fonda as Steinbeck´s protagonist Tom Joad. Read More

Extract

Introduction

Landsvirkjun, the state-owned electric power company in Iceland has for some time been planning a large hydropower plant in the area north of Vatnajokull, Europe´s largest glacier in the east of Iceland. The facility would be built to produce electricity for a 390,000 ton aluminium smelter in Reydarfjördur on the east coast of Iceland.

Until recently a consortioum of Icelandic banks, pension funds and the Norwegian company Norsk Hydro planned to build and run the Reydarfjordur smelter, a prerequisite for initiating the Karahnjukar project. Early 2002 Norsk Hydro decided to postpone its final decision on the project. Subsequently the Icelandic government decided to seek other investors. In september Alcoa and the government signed an agreement to take up talks to build a 295,000 ton smelter in Reydarfjordur run on electric power from the Karahnjukar plant.

According to a previous study conducted for the Iceland Nature Conservation Association the Karahnjukar plant would not be financially viable when valued based on market rates of interest and return on equity expected for a comparable project. As a state owned company Landsvirkjun does however enjoy full financial backing from the state of Iceland and is able to borrow at sovereign rates. The Sumitomo Mitsui Banking Corporation prepared an assessment of Landsvirkjun´s plans in September 2001 confirming that the project could support the cost of capital demanded by Landsvirkjun based on Landsvirkjun´s estimate of future power prices.

There are considerable differences between the current and earlier plans. The size of the power plant is different as well as the expected investment. The buyer profile is different which no doubt has an effect on interest rates and the construction timeline for the Karahnjukar plant is considerably shorter according to the current plans.

This report aims to compare the financial characteristics of the earlier plans for the Karahnjukar plant with the current plans. This includes an analysis of buyer risk profile, estimate of probable power price based on current and forecasted aluminium prices and the constraints provided by the general cost structure in the aluminium industry.

Read the report here or on the original site

British MP Sue Doughty has tabled a Parliamentary motion calling on the British Government to use its diplomatic links with Iceland to persuade the Icelandic Government to terminate the building of a series of dams in the Icelandic Highlands.
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http://www.indymedia.org.uk/en/2005/04/309355.html