The EIB can lend to eligible projects in Iceland under the EU Pre-Accession Programmes and under the European Free Trade Association (EFTA) Facility. The EFTA mandate enables the Bank to support projects notably in the sectors of energy, environment, trans-European networks (TENs) and research, development and innovation located in the territories of the EFTA countries (Iceland, Liechtenstein, Norway and Switzerland). In 2009, the EFTA Facility was extended for a further four-year period (2010-2013) allowing additional loans totalling EUR 800 m to be committed.
Through its membership in the European Economic Area (EEA), Iceland already participates in the single market and contributes financially towards social and economic cohesion in Europe. A significant proportion of the EU’s laws are applied in Iceland today. Iceland also participates, albeit with no voting rights, in a number of EU agencies and programmes, covering areas including enterprise, environment, education and research. Two thirds of Iceland's foreign trade is with EU Member States.
EIB lending in Iceland since 2006 amounts to EUR 386 m. The EIB provided loans, among others, for the construction and extension of geothermal power plants, thus promoting the use of renewable energy and supporting climate action.
Over the coming years, the Bank expects to increase its financing of projects in Iceland, mainly in the field of renewable energy projects such as hydro and geothermal power plants.