The Icelandic Prime Minister is to set up a committee of independent experts to investigate the privatisation of Icelandic energy companies – especially the purchase of HS Orka by Canada’s Magma Energy.

Prime Minister Johanna Sigurdardottir told journalists that the committee will be asked to focus particularly on the legality of non-EEA companies buying into the Icelandic energy market through specially created EEA-based entities. A conclusion is requested by the 15th August.

The PM also announced that a detailed report into the workings of the energy industry will be compiled and made public by the end of the year. A parliamentary bill to limit the extent of private investment in publicly owned businesses is also expected before the end of October.

Johanna Sigurdardottir said during a press conference this afternoon that the effect of cancelling the Magma Energy deal also needs to be investigated – including the possibility of lawsuits against the state.

The government’s decision is a clear blow to Magma Energy and other companies keen to buy up and harness parts of Iceland’s renewable energy wealth – but the PM stopped short of speculating as to whether or not the deal will eventually go ahead. The move can be seen as an attempt by government to depoliticise the issue and allow experts from outside Althingi to influence the important decision.

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