Chinese visit to Iceland brings new contracts

kronur2The Central Bank of Iceland and the national power company have both signed important contracts with China this morning during He Guoqiang’s official visit.

A bilateral currency swap agreement has been signed between the central banks of Iceland and China to the value of ISK 66 billion or 3.5 billion Chinese yuan (USD 512.5 million). The contract is for three years from today and can be extended. Central Bank of Iceland governor Mar Gudmundsson and deputy governor of the Central Bank of China, Hu Xiaolian signed the deal today at Iceland’s Ministry of Foreign Affairs. The currency swap agreement is Iceland’s first since before the banking crisis, when the Nordic countries signed a deal worth EUR 1.5 billion in May 2008 (50 billion from each country). A Nordic-USA currency swap agreement in autumn 2008 famously did not include Iceland.

Landsvirkjun, Iceland’s national power company, has also signed a deal today. The statement of intent with China International Water & Electric Corporation (CWE) and the Export-Import Bank of China (Exim Bank) is intended to strengthen co-operation in the field of renewable energy utilisation.

Icelandic energy companies have already provided investment and consulting for geothermal energy projects in China, including the Xianyang “geothermal city”, and there is now interest in the Chinese companies investing in developments in Iceland.

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