Representatives from Geysir Green Energy, a geothermal company based in Iceland, announced that Goldman Sachs and an executive from Time Warner are currently discussing the details of a potential agreement to purchase 8.5 percent of the company’s shares.
The deal, if it goes through, will not only bring some $30 million to the Icelandic company, it will also make Goldman Sachs Iceland’s first foreign investor in the geothermal sector. For that reason, the potential purchase is gathering some local criticism and even protests.
Executive Vice President of New York-based Time Warner, Olafur Johann Olafsson, and the American investment bank are both independently investigating investments with Geysir, totalling a potential 8.5 per cent sale for the company.
“Since the company was founded, we have been aware of interest from foreign companies who wanted to take part in what we are doing,” Asgeir Margeirsson, the Chief Executive for Geysir told Reuters.
“We decided however to limit ourselves to partners that could bring something of value for us to the table. Goldman Sachs and Olafur Johann Olafsson fulfilled those criteria.”
Geysir Green Energy was founded early this year as a consortium of groups interested in promoting geothermic energy use on an international scale. It’s most important shareholders to date include the Glitnir Bank, the Atorka Group and the FL Group.
As the world’s demands for energy increase and the availability of carbon-based sources decreases, geothermal projects are expected to become very popular. Iceland isn’t the only place capable of harnessing the earth’s natural energy either.
A representative from Geysir said their research in the United States suggests that geothermal energy could provide 20% of the electricity demanded in California in the future and as much as 60% of the needs in Nevada.
“We think the time for geothermal has come,” Margeirsson said. “We have laid the foundations for the continuous build up for our expansion abroad. We want to show the world that we know how to use geothermal energy and maximise its use.”