January 05, 2007 11:32 ET

Geysir Green Energy Founded: Focus on Geothermal Projects Around the World

REYKJAVIK, ICELAND--(CCNMatthews - January 05, 2007) - Glitnir, FL Group and VGK Honnun Engineering have founded an investment company, Geysir Green Energy, with the objective of investing in sustainable energy.

Some key points:

-- FL Group, Glitnir and VGK Honnun Engineering establish Geysir
Green Energy to invest globally in renewable energy projects
with basis of geothermal sources
-- The company aims to invest USD 1 billion in sustainable energy
-- The aim is to become a leader in the harness of sustainable

Geysir Green Energy intends to seek leading market opportunities in the harnessing of geothermal energy, invest in the development and construction of geothermal plants, acquire geothermal plants currently owned by power utilities and participate in the privatisation of energy companies all over the world. Currently, there is vast experience in this field within the company.

The initial equity investment in Geysir Green Energy is USD 100 million. FL Group will be a leading investor in the company with Glitnir and VKG Honnun, but additional equity will be sold to domestic and international investors in the weeks ahead. Glitnir's Corporate Finance Division will manage the sale.

Geysir Green Energy aims to become a leader in investment in geothermal power projects. Expansion is planned through mergers and acquisitions and the development of new projects. With further equity raising from new and existing shareholders the aim is to increase investment capacity up to USD 1 billion.

Asgeir Margeirsson, former Managing Director at Orkuveita Reykjavik (Reykjavik Energy Company), has been appointed CEO of Geysir Green Energy. He will pursue the development of the company and manage its investments. Asgeir Margeirsson has been at the forefront of the Icelandic energy business for several years, both domestically and abroad.

It is estimated that global energy requirements will double over the next 50 years, with a large percentage increasingly being met by sustainable production - versus traditional sources. The European Union has set a target for a 50% increase in sustainable production by the year 2020, and the USA is aiming at doubling its output of energy from sustainable sources over the next 10 years. Geothermal energy is a highly competitive alternative, with far lower costs involved in harnessing it for energy generation than are involved in harnessing sources such as solar power.

Asgeir Margeirsson, CEO of Geysir Green Energy: "Geysir Green Energy will be a major investor in the energy business. Countless opportunities lie ahead and combining the efforts of those who have the expertise and those who have the power to invest will result in a major investment capacity. I am proud to be able to participate in this project having worked several years in the Icelandic energy market."

Hannes Smarason, CEO of FL Group, says that sustainable energy projects are an exciting new field of investment for FL Group. "The role of sustainable energy is becoming increasingly important across the globe. By combining the efforts of different investors we have created a powerful group that will be a major player in the international markets and utilise the expertise that exists in Iceland for the benefit of economical development and environmentally sound energy production. FL Group is proud to be involved in this innovative and exciting project."

Bjarni Armannsson, CEO of Glitnir, says the bank is making a priority of becoming a leading consultant and financer in the field of renewable energy sources, and particular geothermal energy. "Harnessing geothermal power makes it possible to reconcile economic and environmental considerations," he says. "Glitnir aims at creating the financial conditions needed to promote a cleaner environment and also a higher living standard in the future. There is a great potential in this area, and we want to play our part in exploiting it."

Runolfur Maack, Managing Director of VGK Honnun, says Geysir Green Energy will be a company with the ability to put ideas into practice. "Icelandic engineers have had plenty of ideas for development in this area in the past," he says, "but have lacked the financial strength needed to implement them. Geysir Green Energy will combine the technical know-how we have in Iceland with international investment skills. The enterprises involved in the company are all leaders in their field, so we look forward to the future with a real sense of optimism."

About FL Group

FL Group is an investment company, focusing on strategic and private equity investments as well as proprietary trading, with a particular emphasis on active participation in markets with listed securities. The Company focuses on influential investments in companies in Northern Europe on a broad basis. At the end of September 2006 FL Group's total assets amounted to ISK 239.5 billion. FL Group is listed on the Icelandic Stock Exchange (ICEX: FL). The largest shareholders of FL Group are Eignarhaldsfelagid Oddaflug ehf. (19.8%), owned by Hannes Smarason, CEO; Baugur Group (18.1%), Gnupur fjarfestingafelag hf. (17.2%); Icon and Materia Invest (10.7%). The shareholding can in some cases be in the name of Icelandic financial institutions because of forward contracts.

About Glitnir

The financial group Glitnir offers universal banking and is a leading niche player in three global segments; seafood/food, sustainable energy, and offshore supply. Glitnir consider Iceland and Norway as home markets. Services include retail, corporate and investment banking, stock trade and capital management. Glitnir is listed on the Icelandic Stock Exchange. Glitnir recently announced strong profits for the first nine months of 2006, with a return on equity after tax of 41.9 percent. For more information go to:

About VGK Honnun

VGK Honnun is an engineering consulting firm, founded in 1963. The company is made up of VGK Engineering and Honnun Engineering, both established in 1963 which merged on January 1st 2007. VGK Honnun specializes in projects in the areas of geology, geothermal-, hydro- and electrical powerplants, construction design and research, and HVAC systems.

Geothermal energy is defined as heat from the Earth. It is a clean, renewable resource that provides energy in the United States and around the world. It is considered a renewable resource because the heat emanating from the interior of the Earth is essentially limitless. Geothermal energy is contained in underground reservoirs of steam, hot water, and hot dry rocks. The heat continuously flowing from the Earth's interior is estimated to be equivalent to 42 million megawatts of power. The interior of the Earth is expected to remain extremely hot for billions of year to come, ensuring an inexhaustible flow of heat. Sources: Geothermal Energy Association and the U.S. Dept. of Energy.

Copyright c Hugin ASA 2007. All rights reserved.

Contact Information

  • Bjarni Ármannsson
    CEO of Glitnir
    phone +354 440 4005
    Hannes Smárason
    CEO of FL Group
    phone +354 591 4400
    Runólfur Maack
    Managing Director of VGK Hönnun
    phone +354 422 3000
    Ásgeir Margeirsson
    CEO of Geysir Green Energy
    phone +354 844 4564
    Bjørn Richard Johansen
    Managing Director, Corporate Communication
    mobile +47-47 800 100