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  • Matthias Kokorsch

The many ifs of the Finnafjörður harbour project

The Finnafjörður deep-water harbour project in Iceland appears to be a sweet dream for every project- and regional developer – constructing a harbour from scratch in a sparsely populated area that provides enough space to develop your ideas of the perfect harbour while there are ever-growing desires from international companies wanting new shipping routes in the Arctic.


A computer generated model of the Finnafjörður Harbor project. Credit: Bremenports

But this project is not only a dream for planners, developers, and some enthusiastic researchers of the Blue Economy. The Finnafjörður project could awaken an entire region characterised by path-dependencies, lock-ins of sorts, an undiversified economy and labour market, severe out-migration, and socio-economic difficulties from its slumber to no longer be considered a blind spot on the map of ocean-based innovation (see also Kokorsch and Benediktsson, 2018) - a perfect laboratory for economic geographers and researchers of the Blue Economy. Over the years, the surrounding coastal communities have been confronted with several challenges regarding locational factors, mainly since the full privatization of precious fishing grounds took effect in 1990. Some 14 years later, when an international consortium came together, the idea for the Finnafjörður project was born. Eventually, the region could turn its biggest disadvantage, namely its location, into its fortune. The dream was made into reality. But what about its realization? There are several unknown variables in this formula of blue growth and happiness.

Throughout the past decades, regional and coastal community development in Iceland has been dominated by one approach: heavy industries and large-scale infrastructure projects (see also Seyfrit, Bjarnason, & Olafsson, 2010). Usually, such projects came with negative social externalities, ecological sacrifices, and new dependencies. Thus, it is not surprising that the Finnafjörður project parallels the development of Icelandic politics to a certain extent and is not at all uncontested.


After a period of planning and exploration, the Finnafjörður project took off rapidly between 2012 and 2014. These were the years when Iceland experienced the comeback of the neoliberal elite and was governed by a centre-right government lead by prime minster Sigmundur Davíð Gunnlaugsson, whose constituency includes the region around Finnafjörður. In one of his early speeches, he stated that “[…] we are, here in Iceland, sitting in the front row of witnessing climate change and its consequences – positive and negative. We can, therefore, offer the best seats […].” Unsurprisingly, his cabinet was rather thrilled by the prosperous outlook of a melting Arctic. Even less surprising, shortly after that speech, the free trade agreement with China, the big player of the Artic, was signed – Finnafjörður made it on the map for international shipping routes and businesses.


Credit: EFLA

Shipping Route from China to Finnafjord. Credit: EFLA


But is that all that uncontested? While public debates were comparatively quiet, the electorate of this region seemed to be undecided. Not only did Sigmundur David receive the biggest support in this constituency, but the left-green movement, who heavily oppose the project, has its stronghold there. And since 2017, things got even more complicated when a left-green MP took over the ministry for the environment and natural resources. His vita indicates that the mandatory Environmental Impact Assessment might become the Achilles’ heel of this project: Minister Guðmundur Ingi Guðbrandsson was one of the founding fathers of Landvernd, an environmentalist organization, and served as its CEO until 2017. In this role, he opposed and criticized the Finnafjörður project harshly. His influence, however, showed to be limited as a decision by the Icelandic Regional Development Institute believed in Finnafjörður and funded the project in 2018 with some 18m ISK (130.000$) for continuing the preparatory work.

But not only environmental concerns need to be scrutinized before the project becomes a reality. Aspects of social justice need to be addressed. Hitherto they play a subordinate role and are undermined by promises of blue growth often raising the question: blue growth and regional growth for whom and at whose expense? One does not have to read between the lines that all profits of this project will be privatised and losses burdened on the general public[1]. For example, all profitable aspects of the project will be offered to private bidders. At the same time, the Icelandic state is responsible for the provision of the infrastructure (usually not the most profitable part in a sparsely populated country and a region lacking geothermal heat). Eventually, the local municipalities will keep only 9% of the shares. One might suspect that the country's sell-off will continue and the fate of this region will be in the hands of international stakeholders on a contested market. Other large-scale industries and development projects should serve as a warning example.


Getting back to the aspects of blue growth, one needs to discuss and analyze the chances of such a large-scale project for the cornerstones of the blue economy: the diversification of the local economy, coastal transitions and resilience building. The project partners announce a multi-purpose harbour, but when taking a closer look, the promised multiplicity becomes more and more nebulous. There does not seem to be many places for innovative ideas, potential ocean-based growth clusters and small scale industries.

All in all, the Finnafjörður project is undoubtedly an interesting approach for coastal and regional development. Still, there is a lot of work to be done in turning this project into part of a just transition.

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