Capital increase considered to finance Fljót tunnels

Iceland is considering adding to the share capital of the infrastructure company Göng og brú so it can take responsibility for financing and building the Fljót tunnels.

The additional capital could come as cash covering part of the project’s initial cost, or as other assets that generate income. The proposal appears in information from the Icelandic government on the finance and economic affairs minister’s powers connected to the 2027 budget bill.

The government says the authority to increase the company’s share capital is new. Its purpose would be to strengthen the company’s investment capacity and help finance and develop important transport infrastructure.

The company’s first planned tasks could include financing the Ölfusá bridge and carrying out the Fljót tunnels project. Without another arrangement, the bridge would have to be funded entirely by the state budget in 2028 when it is handed over. Work on the tunnels is expected to begin in the second half of 2027.

The Fljót tunnels topped the transport plan’s priority list. They would link Siglufjörður with Fljót and extend for 5.3 kilometres, according to Iceland’s Road and Coastal Administration.

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It is envisaged that among the company’s first projects under the proposed agreement will be financing the Ölfusá bridge, which otherwise would have to be financed entirely by the state treasury in 2028 upon handover, and carrying out the Fljót tunnels project, which is expected to begin in the second half of 2027