(1)

By letter of 4 April 2014 the Icelandic authorities notified their regional aid map applicable from 1 July 2014 to 31 December 2020 (‘the regional aid map’) pursuant to paragraph 156 of the Authority's Guidelines on regional state aid for 2014–2020 (‘the RAG’) (1). These guidelines require the EFTA States that intend to grant regional aid to notify regional aid maps.

(2)

This decision represents the Authority's assessment of the compatibility of the notified map with the RAG in accordance with paragraph 157 of those guidelines. The map itself does not involve any state aid within the meaning of Article 61 of the EEA Agreement. The Authority's approval of the map does not constitute an authorisation to grant any aid. The authorisation of the map establishes, together with the RAG, the framework for granting regional investment aid. In that respect the map constitutes an integral part of the RAG (2).

(3)

A national population coverage of assisted regions in the EFTA States has been established in the RAG. The national population coverage for Iceland for 2014–2020 is 36,5 % (3).

(4)

Iceland is divided into two Statistical regions (4) at level 3:

(5)

Due to the relatively high GDP per capita, no Icelandic region qualifies for the derogation under Article 61(3)(a) of the EEA Agreement (5).

(6)

The Icelandic authorities have notified Iceland outside the Capital region qualifying for the derogation under Article 61(3)(c) of the EEA Agreement, based on low population density (6).

(7)

The Icelandic authorities have submitted a map setting out the designated areas (set out as Annex to this Decision). The designated area, Iceland outside the Capital region, covers a land area of 99 258 km2.

(8)

Iceland outside the Capital region is a Statistical region at level 3 with less than 12,5 inhabitants per km2. Therefore, the designated area qualifies as a sparsely populated area (7).

(9)

The total population of Iceland on 1 January 2014 amounted to 325 671 inhabitants and the total population of the area covered by the notified regional aid map is, according to most recent data published by the national statistical office, 116 919 inhabitants (8). Consequently, the population covered by the notified regional aid map is 35,9 % of the Icelandic population. This is below the national population coverage established for Iceland in the RAG (36,5 %) (9).

(10)

The number of municipalities covered by the notified regional aid map is 67.

(11)

The table below provides an overview of all the municipalities, together with municipality codes (10), included in the regional aid map.

(12)

The eligible area will have a general aid ceiling of 15 % gross grant equivalent (GGE). This will be supplemented by an increase of 20 % for small enterprises or 10 % for medium-sized enterprises. These aid intensities comply with the thresholds set out in paragraphs 154 and 155 of the RAG.

(13)

In compliance with paragraph 156 of the RAG, the notified map will be in force from 1 July 2014 to 31 December 2020. If necessary, as provided for in paragraph 161 of the RAG, the notified map may be subject to a mid-term review in June 2016 to identify possible areas that may be eligible for regional aid under Article 61(3)(a) of the EEA Agreement and the level of the aid intensity corresponding to their GDP per capita.

(14)

In addition, this decision does not restrict the powers of the Authority to review the map in accordance with Article 1(1) in Part I of Protocol 3 to the Surveillance and Court Agreement, if necessary, before the end of the period referred to above.

(15)

On the basis of the foregoing assessment, the Authority considers that the Icelandic regional aid map for 2014-2020 is compatible with the principles set out in the RAG as the area covered does not exceed the eligible population coverage as set out by paragraph 142 of the RAG.