SOG-LOXA POWER PROJECT

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This administration report covers three projects for Iceland: Hydroelectric (Sog and Laxa), Agriculture, and Fertilizer Plant Projects. The Electronic Power Project will help finance hydroelectric plants in order to meet the increased electrical demands of the country. The Agricultural Project will assist in the extension of cultivated land and reconstruction of houses and other buildings on farms. The agriculture project provides a large part of the foreign exchange, and the investment will benefit the social status, as well as the economic benefits of the country, and the Fertilizer Plant Project will lead to a significant reduction in the cost of fertilizer to the farmers, thereby stimulating further land reclamation and agricultural improvement. This program loan will give rise to important foreign exchange benefits and increase production which will reduce imports and increase exports. These projects will form the basis for further diversification and rationalization of the economy of Iceland.