Landsvirkjun, Iceland’s national power company, has tapped the US private placement market with a US$220 million offering.

The state-owned firm raised the issuance size from the original target of US$180 million due to strong demand, a reflection it says of investors’ confidence in the company’s financial position.

BNP Paribas and Rabobank acted as joint placement agents, while Morrison Foerster served as legal adviser.

The bonds were issued in two tranches with maturities of six and eight years. One tranche carries a fixed interest rate of 5.33%, equivalent to a spread of 115 basis points over US treasuries, while the other carries a floating interest rate based on Sofr plus a spread of 169 basis points.

The offering falls under Landsvirkjun’s green finance framework, which reflects its commitment to sustainability and climate-related objectives.   

Landsvirkjun generates electricity solely from renewable sources, including hydropower, geothermal and wind. It is Iceland’s biggest energy company, supplying over 70% of all electricity produced for the country’s industries, services, and households. 

The proceeds will be used to finance Landsvirkjun’s new power projects, including the Vadalda wind farm.   

Vadalda will be Iceland’s first wind farm, consisting of 28 wind turbines with a total installed capacity of 120 megawatts. Construction has already begun, with the first 14 turbines expected to become operational this fall and the remaining turbines a year later, bringing the wind farm into full operation before the end of 2027.