ICELAND - A group of Icelandic pension schemes has acquired 25% of geothermal power company HS Orka from the Swedish subsidiary of Vancouver-based Magma Energy.

The ISK8bn (€49m) acquisition comes with an option until February 2012 to acquire additional shares that would, if exercised, increase the stake to 33.4%.

In any event, the already agreed shareholding is above the 22.5% interest that allows the pension schemes to appoint board members and participate in major decisions. 

The pension scheme group did not respond to requests for information today. The group is understood to be led by Stafir - the pension scheme for Icelandic co-operatives and the seventh largest in the market - and to include the public sector pension fund.

It is not yet clear what form the consortium has taken, how many pension funds are involved or whether the participants have equal stakes in the deal. 

Sixteen Icelandic pension schemes have banded together in recent years to acquire private equity stakes via the ISK30bn Enterprise Investment Fund (FSI).

FSI managing director Finnbogi Jónsson today said the FSI had not been involved in the deal and that the pension schemes had acted directly and independently.

The consortium is paying the same price for the shareholding Magma paid its previous owners, a group of Icelandic municipalities.

That controversial decision, which led to a surge in protectionist sentiment and protracted legal activity, effectively forced Magma to offer shares back to Icelandic investors, reportedly including Bjork.

HS Orka is Iceland's largest private energy company, producing 9% of the country's power and 10% of its heating.