Financing of PCC BakkiSilicon hf. completed

10.06.2015
  • Total project cost approximately USD 300m 
  • German KfW IPEX Bank is the primary lender
  • Bakkastakkur slhf., owned by Icelandic pension funds and Íslandsbanki, invest USD 80m
  • ESA concluded that no state aid is involved in PCC´s power and transmission contracts
  • Direct domestic investment estimated to be ISK 5-7bn over the next 3 years
  • Groundwork to commence at Bakki in the coming weeks
  • Íslandsbanki and Summa acted as equity advisors to PCC SE and Bakkastakkur 


June 9th, 2015 – Reykjavík Íslandsbanki Corporate Finance, on behalf of PCC BakkiSilicon hf., is pleased to announce the successful completion of financing of the company‘s new silicon metal production plant, to be built in the industrial area of Bakki near Húsavík in the northern part of Iceland. This marks the end of a 3 year process which began when PCC SE mandated Íslandsbanki Corporate Finance as its equity advisor in the financing of the project.

In total, the project´s financing needs are approximately USD 300m. The German specialist financier KfW IPEX Bank is the project´s primary lender, while USD 80m is financed by Icelandic investors. The project will undoubtedly have a positive impact on employment prospects, and development, in addition to general investment in Iceland. The production plant alone will create about 120 new jobs in the area, not accounting for indirect employment activities. 

As previously stated, approximately quarter of the total investment is financed by Bakkastakkur slhf., in the form of subordinated debt and preferred shares in PCC BakkiSilicon hf. Bakkastakkur slhf. is owned by a group of Icelandic pension funds along with Íslandsbanki. Summa Asset Management provided advisory work to Bakkastakkur and its owners on the investment. 

In late May, the EFTA Surveillance Authority (“ESA”) concluded that the power and transmission contracts entered into by PCC BakkiSilicon, with Landsvirkjun and Landsnet, do not confer an economic advantage upon PCC and therefore do not involve state aid. This conclusion was the final key condition precedent (CP) for the conclusion of the equity financing and thereby the realisation of the project.

Birna Einarsdóttir, CEO of Íslandsbanki:

“We at Íslandsbanki are very pleased with this important milestone in the PCC BakkiSilicon project. It is a very positive step for the Icelandic economy as it directly supports employment development in the northern part of Iceland as well as investment. Íslandsbanki is very proud of its participation in making this investment a reality”. 

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