Stateaid, 23.3million Euro investment aid tosilicon metalplant in Iceland approved

12.3.2014

The EFTA Surveillance Authority  decided today not to raise objections to the granting of aid to PCC BakkiSilicon hf. for the construction of a silicon metal plant in the Northeast part of Iceland.

The Icelandic Treasury and Norðurþing municipality will grant the aid to PCC over a period of up to 10 years in the form of a direct cash grant, tax exemptions and discounts from various fees, charges and duties.

The new plant will provide 120 direct jobs and the company has committed to maintain the investment in the region for a minimum period of five years after completion of the project.

«The aid measures contribute to the creation of new jobs and a diversification of the economy in a region in economic decline and compensate in part for costs arising from disadvantages specific to this particular location. This investement will hopefully turn the trend and be followed by further development of the industrial site at Húsavík», Oda Helen Sletnes, President of the EFTA Surveillance Authority, stated.

Iceland will monitor the aid and has committed to a specific annual reporting obligation to the Authority. When the granted aid reaches the approved amount, any further aid will be discontinued. Moreover, PCC cannot benefit from state aid beyond 27 September 2027.

The silicon metal plant is power intensive, and PCC intends to purchase electricity from the national power company, Landsvirkjun hf. A power contract has not yet been notified to the Authority but the Icelandic authorities have committed to do so for legal certainty. Power prices have therefore not been cleared for state aid purposes.

On 26 February, the Authority approved the Icelandic plans to expand and improve the Húsavík harbour. PCC will be using this infrastructure, amongst other.

Quick facts:

• PCC BakkiSilicon hf is owned by PCC SE – an international consortium of companies headquartered in Germany
• Aid amount: EUR 23.3 million (13.7 million in net present value)
• Total investment cost: EUR 176 million
• Aid intensity: 8.7 percent
• The notified aid was assessed under the Authority's Regional Aid Guidelines

A non-confidential version of today's Decision will be published in the register of state aid decisions on the Authority's website, normally within a month.

For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187