Port for sustainable development in the north-east of Iceland: bremenports founds company with Icelandic partners / Project development is scheduled for several decades
The development of the port at Finnafjord in the north-east of Iceland is taking shape. Today, 11 April 2019, representatives of the parties involved in the project met in Reykjavik to sign agreements which will enable formation of the Finnafjord Port Development Company (FFPD).
The initial idea for this project dates back to the year 2007, when the Icelandic central government, together with the municipalities of Langanesbyggð and Vopnafjarðarhreppur, commissioned EFLA, an Icelandic consultant company, to investigate the feasibility of creating a port and industrial location at Finnafjord and to find suitable partners for planning the project. A corresponding cooperation agreement was signed between EFLA, bremenports and the municipal governments in 2014. Following the positive outcome of the preliminary investigations, the preparation of this new agreement began in 2016.
According to the Memorandum of Understanding, the project covers following items:
The parties are agreed that
bremenports will initially hold 66 per cent of the shares in the port development company. EFLA will have a shareholding of 26 per cent and the remaining 8 per cent will be held by the Icelandic municipalities.
During the next stage it is expectable that FFPD will be joined by an Investor.
In 2017, Bremen’s Senate adopted a fundamental resolution which paved the way for the foundation of the new company. Martin Günthner, Senator for Economic Affairs, Labour and Ports, stated: “The port project in Iceland provides a concrete long-term perspective for development that will undoubtedly continue for several decades. It creates conditions that will enable sustainable development of the Arctic and will help to make the emergent new shipping routes safer. Moreover, the project offers enormous development potential for a structurally weak region. It is a great honour that Iceland has asked bremenports to assume the role of leading partner in this project.”
The site for which plans are now to be drawn up is comparatively large and has space for the construction of 6 km of quays and the development of more than 1200 hectares of hinterland. The region is virtually uninhabited and has excellent geological conditions for construction of the port. The water in the bay, for instance, is almost 20 metres deep. The wave action on this side of Iceland is particularly low and the bay itself is afforded additional protection by a headland. In contrast to other fjords in Iceland, the hinterland is not mountainous, but flat. This will provide business locations for port-related industries which can be supplied with energy from renewable sources. Another factor in favour of creating a port in this remote region is that the greater part of the required building materials can be extracted directly from the ground.
The municipalities involved in the project have a total population of around 500. The fishing industry is the largest employer in the region. Climate change, however, means that the future development of this industry is uncertain. The municipalities therefore have a keen interest in developing the port in order to create new prospects for the local population, amongst other things from utilisation of the locally available renewable energy sources, and to safeguard and upgrade the local social infrastructure over the long term.
The Arctic is expected to undergo considerable changes, amongst other things because of the changes to shipping routes. If the North-East Passage between Asia and the USA becomes navigable all year round, the journey times between these continents will be reduced by more than two wecks10. Finnafjord would therefore be the ideal location as the basic hub for a universal port from which containers could be redistributed to the different destination regions. In view of the present increase in shipping traffic, there is already urgent demand for a search and rescue port for ships in distress. Other plans currently under consideration include the construction of a plant for the production of hydrogen, which could also play a key role in the development of sustainable shipping in the future.
In that connection, Robert Howe, Managing Director of bremenports, stresses the sustainable policy behind the project: “Climate change will lead to economic development in this region. It is of global importance that this development is based on very strict sustainability criterias. The Iceland Partners and bremenports regard it as an absolute must that the plans for the Finnafjord port are designed to meet stringent ecological criteria throughout all phases of the project.”
Hafsteinn Helgason, Efla hf. Consulting Engineers, Director Business Development
“The preparation for this moment has taken a long time since the harbor in Finna Fjord is a huge project that will be in the works for decades to come. During our research of the area we have seen that conditions for development are good.”
Elias Peturson, Municipality of Langanesbyggð, Mayor
„We have been heading towards this stepping stone that was reached here today for a long time. The harbor, as a new gateway to the world, will reinforce the population of the area and increase opportunities in North- and East-Iceland. It is important that the municipalities are among shareholders in the new development company. And even more important, will be sole owners of the company that will own and operate the harbor and premises. It is also worth noting that now with establishment of the companies, a proper forum for purposeful and beneficial collaboration with landowners in Finnafjörður is finally formed.”
Þór Steinarsson, Municipality of Vopnafjarðarhreppur, Mayor
„This signing is definitely a cause for a celebration since it marks a significant milestone in the
development of this important project. The port at Finna Fjord will substantively strengthen the municipalities in the area and also support the economy in the whole Northeast of Iceland.“