The EFTA Surveillance Authority (ESA) has today approved a capital increase of an estimated EUR 50 million to Farice, a state-owned provider of international telecommunications services, for the construction of the IRIS submarine cable.
Iceland’s telecommunications and internet traffic is currently dependent on two submarine cables – FARICE-1 and DANICE – that connect the country to Europe. Both cables are operated by Farice. Because of its remote geographic location, Iceland is heavily reliant on these two existing two submarine cables for its digital resilience and participation in the global economy.
To improve security and strengthen its digital resilience, Iceland needs to diversify its international telecommunications networks. The addition of a third submarine cable to Europe that is not subject to the same potential risks as the existing ones, is therefore vital in safeguarding Iceland’s digital connectivity.
The Icelandic government has selected Farice to own, operate and oversee the construction of the third submarine cable. The cable, named IRIS, will be connected with a landing station on the west coast of Ireland.
Iceland has opted to support the investment of the project through a share capital increase in Farice. The measure will be directly tied to the actual cost incurred, and the capital increase will be granted in tranches to meet actual investment costs. If needed, overcompensation will be controlled through capital decreases, dividend payments or other available means.
Iceland notified ESA on 23 March 2021 of the measure, and ESA considers the state aid to be compatible with the functioning of the EEA Agreement.
A non-confidential version of the decision will be published here as soon as possible.