INFRASTRUCTURE AND PROJECT FINANCE

CREDIT OPINION20 November 2019

Update

RATINGS

LandsvirkjunDomicile Iceland

Long Term Rating Baa1

Type Senior Unsecured - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Graham W Taylor +44.20.7772.5206VP-Sr Credit Officergraham.taylor@moodys.com

Fara Babaev +44.20.7772.5444Associate Analystfara.babaev@moodys.com

Paul Marty +44.20.7772.1036Senior Vice President/Managerpaul.marty@moodys.com

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

LandsvirkjunUpdate following rating upgrade

SummaryLandsvirkjun's (Baa1 stable) credit quality reflects the company's (1) dominant position inthe Icelandic energy market and its strategic importance as the provider of electricity tothe power-intensive industry, which directly contributes around a third of the country'sexports; (2) low-cost renewable energy generation assets, which require minimal capitalinvestments for maintenance; and (3) track record of stable operating performance andability to withstand significant volatility in the commodity markets.

However, Landsvirkjun's credit profile also takes into account (1) its large and concentratedexposure to a small number of counterparties, mainly in the aluminium industry; (2) theuncertainties over the timing and terms of the expected divestiture of the company'scontrolling interest in Landsnet (Iceland's electricity transmission system owner); and (3) theuncertainties over the future profile of dividends.

Exhibit 1

Landsvirkjun's lower capital investments will improve its free cash flow generation

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 2017 2018 2019F 2020F

$ m

illio

n

Funds from operations Capital Expenditures FFO / Net Debt (RHS)

All figures and ratios presented are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments forNon-Financial Corporations. Moody's Forecasts (F) are Moody's opinion and do not represent the views of the issuer.Source: Moody's Financial Metrics™

Given Landsvirkjun's 100% ownership by the Government of Iceland (A2 stable), thecompany is rated according to our Government-Related Issuers rating methodology. TheBaa1 unguaranteed ratings of Landsvirkjun's $1 billion euro medium-term note (EMTN)programme and the notes issued under it benefit from three notches of uplift from thecompany’s Baseline Credit Assessment (BCA) of ba1. This uplift reflects the high likelihoodof Landsvirkjun receiving extraordinary support from the sovereign in the event of financialdistress. The A3 guaranteed ratings of Landsvirkjun's $2.5 billion EMTN programme and the

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

notes issued under it reflect the benefit of the guarantee of collection issued by the Icelandic government.

Credit strengths

» Dominant position as a power generation company in the Icelandic energy market

» Long-term take-or-pay contracts, which provide predictability of volume sales

» Low capital investment requirements, which will result in positive free cash flow

» Support from the owner, which provides an uplift to Landsvirkjun's standalone credit profile

Credit challenges

» Large exposure to a small number of counterparties in the aluminium industry, although this risk is mitigated by the competitivelypriced aluminium smelting plants in Iceland and parent guarantees

» Aluminium price volatility, because around a third of Landsvirkjun's generation is sold under contracts linked to aluminium prices

» Uncertainties over future dividend increases

» Uncertainties over the timing and terms of the expected divestiture of the company's controlling interest in Landsnet, the electricitytransmission system owner

Rating outlookThe stable outlook reflects our expectation that Landsvirkjun will achieve further reductions in net debt and continue to prudentlymanage its exposure to market risks. The outlook also reflects our expectation that any disposal of Landsnet will be completed onterms that do not result in a deterioration of Landsvirkjun's credit quality.

Factors that could lead to an upgrade

» An upgrade of the BCA is unlikely before the terms of the Landsnet disposal are announced. Following the completion ortermination of such a transaction, the BCA could be upgraded if Landsvirkjun achieved funds from operations (FFO)/net debtconsistently above the mid-20s and retained cash flow (RCF)/net debt consistently above the midteens, both in percentage terms.Any potential upgrade of the unguaranteed rating would take account of the BCA, the level of the rating of the Government ofIceland and our view of the likelihood of extraordinary support.

» The guaranteed ratings could be upgraded if the government's rating was upgraded.

Factors that could lead to a downgrade

» The BCA and unguaranteed ratings could be downgraded if Landsvirkjun's FFO/net debt appeared likely to decline below the highteens or its RCF/net debt below the low-double digits, both in percentage terms. The ratings could also be downgraded if thegovernment's rating was downgraded, or if our assessment of high support for the company was to be revised downwards.

» The guaranteed ratings could be downgraded if the government's rating was downgraded.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Key indicators

Exhibit 2

LandsvirkjunDec-14 Dec-15 Dec-16 Dec-17 Dec-18 2019 (E) 2020 (E)

(CFO Pre-W/C + Interest) / Interest Expense 3.7x 4.2x 4.2x 4.2x 4.1x 4x-5x 4.5x-5.5x

(CFO Pre-W/C) / Debt 10.1% 11.3% 10.4% 11.4% 13.9% 14%-16% 16%-19%

(CFO Pre-W/C) / Net Debt 11.0% 12.1% 11.1% 12.1% 14.7% 16%-19% 18%-21%

(CFO Pre-W/C - Dividends) / Debt 9.5% 10.7% 9.7% 10.8% 13.2% 10%-14% 11%-15%

All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations. For definitions of Moody's most common ratioterms, please see the accompanying User's Guide.Moody's Forecasts (F) and Estimates (E) are Moody's opinion and do not represent the views of the issuer. Periods are financial year-end unless otherwise indicated.Source: Moody's Financial Metrics™

ProfileLandsvirkjun is the dominant power producer in Iceland, responsible for about 70% of the country's total electricity generation. Thecompany provides 100% renewable energy for domestic users via electricity sales to public utilities, although most of the sales are topower-intensive industries and are mostly for aluminium smelting under long-term take-or-pay contracts. In addition, Landsvirkjun isthe majority owner (64.7%) of Landsnet, the country’s fully regulated electricity transmission system owner and operator.

Exhibit 3

2018 revenue breakdown by business segmentExhibit 4

2018 EBITDA breakdown by business segment

Electricity production83%

Electricity transmission17%

Other segments0%

Source: Landsvirkjun's 2018 audited financial accounts

Electricity production77%

Electricity transmission23%

Other segments0%

Source: Landsvirkjun's 2018 audited financial accounts

Landsvirkjun is a partnership company wholly owned by the Government of Iceland; 99.9% of the company is directly owned by thestate and the rest is owned by Eignarhlutir hf., a special-purpose vehicle owned by the state.

Detailed credit considerationsDominant power generation company in the Icelandic energy marketLandsvirkjun is Iceland's largest power producer, with a total installed generation capacity of about 2,145 megawatts (MW), whichrepresents around 70% of the country's total electricity generation capacity. The company currently operates 15 hydropower plants,three geothermal plants and two wind turbines. Landsvirkjun generates about 92% of the energy from hydropower plants and 8%from geothermal resources. Its sales volume in 2018 was around 14.8 terawatt hours, mainly from glacier- and reservoir-backed hydropower. Landsvirkjun's portfolio of generation assets compares well with Iceland’s generation mix of around 70% hydro-based sourcesand 30% geothermal-based sources.

Landsvirkjun has a very low marginal cost of production associated with its power generation assets. In addition, competition fromsmaller regional power producers is limited. However, these strengths are balanced by the fact that the power market in Iceland issmall, geographically isolated and highly dependent on the demand from power-intensive industries, which use around 80% of all theelectricity generated in the country.

3 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Long-term contracts with industrial customers provide earnings predictability, but there is concentrated exposure to asmall number of counterpartiesLandsvirkjun is predominantly a wholesale electricity producer, with about 83% of its revenue coming from power sales in 2018. Mostof Landsvirkjun's generated energy is sold to power-intensive industry customers under long-term take-or-pay, US dollar-denominatedcontracts, which provide valuable foreign-currency earnings and good visibility into the long-term power demand.

However, Landsvirkjun has significant concentration risk because of its exposure to a small number of counterparties. Its three largestcustomers, Alcoa (its subsidiary, Alcoa Nederland Holding B.V. is rated Ba1 stable), Rio Tinto plc (A2 stable) and Century AluminumCompany (B3 stable), are aluminium companies that purchase around 70% of the company’s generation output.

According to our base metals outlook1, aluminium remains in overcapacity given the high Chinese production, but tightness in therest of the world has contributed to a better overall global balance, and London Metal Exchange inventories are significantly below thehighs reached in 2012-14. The events contributing to aluminium's and alumina's stronger performance in 2018 (potential sanctionsagainst United Co. Rusal, Norsk Hydro ASA having to curtail its Brazilian alumina refinery and aluminium smelter, and Section 232tariffs on aluminium imports into the US) are no longer relevant factors for the market, although Section 232 tariffs remain in place foraluminium imported from other countries into the US. This is reflected in an around 15% drop in average aluminium prices (to $1,800/tonne) through November 2019 from an average in 2018.

Nevertheless, aluminium smelting plants in Iceland are cost efficient compared with their global peers because of the competitivepower prices in the country, which is a clear advantage, given the energy-intensive nature of aluminium smelting. Therefore, aluminiumsmelters in Iceland are often better positioned than some competitors in other countries during periods of low aluminium prices.Landsvirkjun has long-term relationships with its counterparties, which have demonstrated a good track record of timely paymentseven during periods of economic stress.

Exhibit 5

Aluminium producers represent almost 73% of the electricity salesExhibit 6

Icelandic power prices remain competitive compared with those inother aluminium-producing countries

Aluminium industry73%

Local utilities15%

Other power intensive customers11%

Landsnet1%

Source: Landsvirkjun's 2018 annual report

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

2010 2015 2016 2017 2018

$/M

Wh

Australia Canada New Zealand

USA Iceland

The chart shows power prices to industrial consumers.Sources: www.gov.uk, FactSet and Landsvirkjun

Improved business-risk profile because of a reduced aluminium price exposureAbout 30% of Landsvirkjun's generation output is currently sold under contracts directly linked to aluminium prices. Although thisratio has fallen significantly in recent years, particularly following the renegotiation of an important contract in November 2019,Landsvirkjun remains exposed to base metal price risk, unlike other utilities in Europe outside of Iceland. In 2018, the share of thecompany's electricity sales linked to aluminium prices was around 46% excluding hedges, but this share in revenue mix fluctuatesdepending on aluminium prices. The company hedges its aluminium price exposure and hence reduces its exposure to aluminium pricefluctuations.

4 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

In recent years, Landsvirkjun signed a couple of new contracts with companies in the silicon metal and data centre industries. Theselong-term power contracts will provide more diversification and reduce Landsvirkjun's exposure to aluminium price volatility. Weexpect Landsvirkjun to maintain its prudent financial policy and continue to implement hedging agreements that provide greatervisibility into cash flow and help the company smooth its exposure to aluminium prices in the short term.

Exhibit 7

Historically, the company's average electricity price to power intensive customers was highly correlated with the aluminium price

-

500

1,000

1,500

2,000

2,500

3,000

0

5

10

15

20

25

30

35

40

45

50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$/ton

ne

$/M

Wh

Average price to local utilities (LHS) Average price to power intensive customers (LHS) Average aluminium price (RHS)

Sources: Landsvirkjun's financial statements, Moody's Investors Service and FactSet

Reduced capital spending will strengthen free cash flow, but dividends are likely to rise furtherLandsvirkjun operates a modern, well-maintained and developed asset base, and, therefore, significant maintenance investments arenot required. In recent years, the company has invested in the construction of the Theistareykir geothermal station (90 MW) and in theexpansion of the Búrfell hydropower station (100 MW), both of which were commissioned in 2018. However, there are no decisions toinvest in new projects at this juncture. Landsvirkjun's planned capital spending mainly relates to the improvement in the transmissionsystem and general maintenance of the company's assets. Its capital investment programme is therefore likely to remain low.

Exhibit 8

Landsvirkjun's capital spending/net PP&E is likely to be less than 3%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F

$ m

illio

n

CAPEX Capex/Net PPE (RHS)

All figures and ratios are based on reported financial data. Moody's Forecasts (F) are Moody's opinion and do not represent the views of the issuer. PP&E stands for property, plant andequipment.Sources: Landsvirkjun financial statements and Moody's Investors Service

Given Landsvirkjun's solid profitability and low investments, we expect the company to achieve strong free cash flow and continue toreduce its financial leverage.

However, strong free cash flow will also allow the company to substantially increase the dividends to its shareholder. Substantialincreases in dividends would reduce the pace of deleveraging and put downward pressure on the company's RCF/net debt.

5 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Exhibit 9

The company has made significant progress in reducing its debt position

Maximum

Minimum

8%

10%

12%

14%

16%

18%

20%

FFO/Net Debt

0

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014 2015 2016 2017 2018 2019F 2020F

$ m

illio

n

Total Debt Net Debt

All figures and ratios are calculated using Moody’s estimates and standard adjustments. Moody's Forecasts (F) are Moody's opinion and do not represent the views of the issuer.Source: Moody's Investor Service

Implementation of hedging agreements provides an improved risk positioningLandsvirkjun has a currency mismatch between its income, which is mainly denominated in US dollars, and its debt-servicingobligations, which are denominated in four currencies (before currency swaps) — the US dollar (70% of total debt), the euro (15%),the Icelandic krona (14%) and a small balance in Swiss francs (1%). Over the last few years, the company entered into a series of cross-currency swap agreements as well as new issuances of debt in US dollars that have reduced its exposure to non-US dollar risk to around13% of the debt portfolio.

In addition, Landsvirkjun has made material progress in reducing its exposure to interest rate volatility. The share of floating-rate debt,taking into account hedging arrangements, represented around 27% of the company's total outstanding debt as of December 2018,down from almost 60% in 2014.

Disposal of the electricity transmission business would have a muted impact on Landsvirkjun's credit qualityLandsnet manages electricity transmission and system operation in Iceland. The grid includes more than 3,000 kilometres oftransmission lines and about 70 substations and transformer stations. Landsvirkjun owns 64.7% of Landsnet and fully consolidates itsaccounts based on management control.

The Ministry of Tourism, Industry and Innovation proposed a disposal of Landsnet so that the Government of Iceland becomes thedirect owner. The unbundling would align the country with the European Union's principles of separation between generation andtransmission.

A working group was appointed in March 2019, but the timing of the completion of its assignment remains uncertain.

Landsnet contributed around 23% of Landsvirkjun's total EBITDA and 14% of its total debt as of 2018. Excluding Landsnet, the group'sEBITDA would decline to $298 million from $390 million. Landsnet had a gross debt of $308 million as of December 2018 (excludingthe parent company loan), which we also expect to be deconsolidated. The book value of Landsnet’s equity was around $370 million asof 2018, of which around $240 million was Landsvirkjun’s share (64.7%).

Deconsolidating Landsnet would reduce Landsvirkjun’s FFO/net debt by 1-2 percentage points, before taking account of any proceedsreceived from the sale.

Low exposure to the decarbonisation riskAfter signing and ratifying the Paris Agreement in April 2016, Iceland has committed to the same target as the European Union ofreducing greenhouse gas emissions by at least 40% from the 1990 levels by 2030. These targets are designed to significantly decreasecarbon emissions in the region’s economies. We believe that unregulated utilities, which account for 40% of the European Union'scarbon emissions, will need to deliver a significant share of the reductions and that this will create a variety of risks and opportunitiesfor individual utilities.

6 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

In the case of Landsvirkjun, the company has a very low exposure to carbon transition risk compared with its peers, given its low-carbon-emission nature and the very low cost of its power-generation fleet. All of Landsvirkjun’s power generation comes fromrenewable energy, with the overwhelming majority coming from hydropower.

In 2018, Landsvirkjun issued a US private placement in the amount of $200 million under the green bond format. The proceeds werefully allocated to development of Theistareykir power station and the expansion of Búrfell power station.

Our framework for assessing the risk associated with decarbonisation in this industry is set out in Carbon Transition Brings Risks andOpportunities for Unregulated Utilities, published on 26 June 2018.

Support from the owner provides an uplift to Landsvirkjun's standalone credit profileGiven its 100% ownership by the Icelandic government, Landsvirkjun is considered a Government-Related Issuer under ourmethodology.

The company's unguaranteed ratings incorporate our expectation that extraordinary financial support from the Icelandic governmentwould be forthcoming, if needed. Our high support assumption reflects (1) Landsvirkjun's strategic importance to Iceland, given thecompany's position as the country's dominant power producer and the role it plays in providing electricity to the power-intensiveindustry, which directly contributes to almost 35% of Iceland's exports; and (2) the high level of commitment that the government hasshown in the past through the provision of guarantees of collection to support the company's debt. Accordingly, the Baa1 and (P)Baa1/(P)P-2 unguaranteed ratings of Landsvirkjun's $1 billion EMTN programme and the notes issued under it benefit from three notches ofuplift from the company's ba1 BCA.

Our assessment of very high default dependence balances Landsvirkjun's position as the country's dominant electric utility, with thecompany's high level of US dollar-denominated revenue coming from contracts with aluminium smelters that have internationalparent companies.

Part of Landsvirkjun's debt benefits from guarantees of collection issued by the Icelandic governmentThe A3 and (P)A3/(P)P-2 guaranteed ratings of Landsvirkjun's $2.5 billion EMTN programme and the notes issued under it reflect thevalue of the guarantee of collection issued by the Icelandic government. The guarantees of collection do not offer bondholders thesame contractual protection as a timely payment guarantee. Although small, there is a potential risk that the government would notstep in with timely repayment should the company fail to meet its obligations because exhaustive administrative and legal proceduresmust be followed before the shareholders are obliged to pay. The A3 ratings are positioned one notch below the government rating.This reflects a residual uncertainty over timely payments from a single-A-rated sovereign.

7 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Liquidity analysisLandsvirkjun's liquidity is strong. As of June 2019, the company's liquidity was supported by $77 million of cash and cash equivalents.In July 2019, the company refinanced a $200 million facility with a $150 million committed long-term revolving credit facility withinternational and domestic commercial banks, maturing in December 2022. This bank facility does not contain financial covenants.

Landsvirkjun's debt maturities over the next two years amount to about $453 million, which represent around 23% of its total debt.We expect the company to have enough liquidity to carry it through 2019 and 2020, given the available cash and credit lines, coupledwith the forecast positive free cash flow generation.

Exhibit 10

Landsvirkjun's debt maturity profile

-

200

400

600

800

1,000

1,200

2019 2020 2021 2022 2023 after 2023

$ m

illio

n

Sources: Landsvirkjun financial statements and Moody's Investor Service

8 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Rating methodology and scorecard factorsIn our assessment of Landsvirkjun's credit profile, we apply our Unregulated Utilities and Unregulated Power Companies ratingmethodology, published in May 2017, and our Government-Related Issuers rating methodology, published in June 2018. Please see theRating Methodologies page on www.moodys.com for a copy of these methodologies.

Exhibit 11

Rating factorsLandsvirkjun

Unregulated Utilities and Unregulated Power Companies Industry Grid [1][2]

Factor 1 : Scale (10%) Measure Score Measure Score

a) Scale (USD Billion) Ba Ba Ba Ba

Factor 2 : Business Profile (40%)

a) Market Diversification Ba Ba Ba Ba

b) Hedging and Integration Impact on Cash Flow Predictability A A A A

c) Market Framework & Positioning Ba Ba Ba Ba

d) Capital Requirements and Operational Performance Aaa Aaa Aaa Aaa

Factor 3 : Financial Policy (10%)

a) Financial Policy Baa Baa Baa Baa

Factor 4 : Leverage and Coverage (40%)

a) (CFO Pre-W/C + Interest) / Interest (3 Year Avg) 4.2x Baa 4x - 5x Baa

b) (CFO Pre-W/C) / Debt (3 Year Avg) 11.8% B 14% - 20% Ba

c) RCF / Debt (3 Year Avg) 11.2% Ba 12% - 15% Ba

Rating:

a) Scorecard indicated outcome Ba1 Baa3

b) Actual BCA Assigned ba1

Government-Related Issuer

a) Baseline Credit Assessment

b) Government Local Currency Rating

c) Default Dependence

d) Support

e) Final Rating Outcome

Current

FYE 12/31/2018

Moody's 12-18 Month Forward View

As of November 2019 [3]

Factor

ba1

A2

Very High

High

Baa1

[1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations.[2] As of 31 December 2018.[3] This represents Moody's forward view, not the view of the issuer, and unless noted in the text, does not incorporate significant acquisitions and divestitures.Source: Moody's Financial Metrics™

9 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Appendix

Exhibit 12

Peer comparisonLandsvirkjun

FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE

Dec-16 Dec-17 Dec-18 Dec-16 Dec-17 Dec-18 Dec-16 Dec-17 Dec-18 Dec-16 Dec-17 Dec-18

Revenue 412 483 531 3,094 3,292 3,363 4,019 5,107 6,190 5,887 6,147 6,806

EBITDA 301 346 391 1,162 1,088 1,032 1,056 1,464 1,914 1,737 2,572 2,195

Total Debt 2,140 2,210 2,039 2,967 2,862 2,585 6,645 7,387 8,470 4,955 5,219 4,539

Cash & Cash Equivalents 145 127 116 29 34 68 5,436 4,680 668 905 1,842 2,739

EBITDA margin % 72.9% 71.8% 73.7% 37.5% 33.1% 30.7% 26.3% 28.7% 30.9% 29.5% 41.8% 32.2%

FFO / Net Debt 11.1% 12.1% 14.7% 27.7% 29.2% 32.4% 70.7% 40.9% 18.9% 19.9% 31.1% 95.5%

RCF / Net Debt 10.4% 11.4% 14.0% 21.8% 24.0% 24.3% -14.6% -2.5% 4.6% 19.3% 19.9% 56.4%

(FFO + Interest Expense) / Interest Expense 4.2x 4.2x 4.1x 7.9x 7.7x 8.1x 5.3x 5.9x 8.5x 5.5x 7.0x 13.4x

Net Debt / EBITDA 6.6x 6.0x 4.9x 2.7x 2.4x 2.5x 1.2x 1.7x 4.2x 2.4x 1.3x 0.9x

(in USD million)

Landsvirkjun VERBUND AG Fortum Oyj Statkraft AS

Baa2 Stable Baa1 Positive Baa2 Rating(s) Under Review Baa1 Stable

All figures and ratios calculated using Moody’s estimates and standard adjustments. FYE = Financial year-end. LTM = Last 12 months.Source: Moody’s Financial Metrics™

Exhibit 13

Debt adjustment breakdownLandsvirkjun

FYE FYE FYE FYE FYE

(in USD million) Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

As Reported Total Debt 2,397.5 2,127.5 2,105.0 2,169.2 2,000.9

Pensions 26 28 35 41 38

Moody's Adjusted Total Debt 2,423.9 2,155.2 2,140.4 2,209.8 2,038.9

All figures are calculated using Moody’s estimates and standard adjustments.Source: Moody’s Financial Metrics™

Exhibit 14

EBITDA adjustment breakdownLandsvirkjun

FYE FYE FYE FYE FYE

(in USD million) Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

As Reported EBITDA 316.0 312.8 294.8 356.3 391.0

Unusual Items - Income Statement 18.0 10.3 4.8 (8.4) 1.7

Non-Standard Public Adjustments (3.2) (2.6) 1.1 (1.7) (1.2)

Moody's Adjusted EBITDA 330.8 320.4 300.8 346.2 391.5

Unusual items include, among others, fair value changes in embedded derivatives, fair value changes in other derivatives and foreign exchange difference.All figures are calculated using Moody’s estimates and standard adjustments.For definitions of Moody's EBITDA, please see the User's Guide.Source: Moody’s Financial Metrics™

10 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Exhibit 15

Selected Moody's-adjusted financial dataLandsvirkjun

FYE FYE FYE FYE FYE

(in USD million) Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

INCOME STATEMENT

Revenue 407.5 407.5 412.4 482.5 531.0

EBITDA 330.8 320.4 300.8 346.2 391.5

EBITDA margin % 81.2% 78.6% 72.9% 71.8% 73.7%

EBIT 216.7 204.9 182.2 219.2 266.0

EBIT margin % 53.2% 50.3% 44.2% 45.4% 50.1%

Interest Expense 90.6 75.8 69.1 78.8 91.7

BALANCE SHEET

Cash & Cash Equivalents 207.1 142.1 144.5 126.5 116.3

Total Assets 4,268.0 4,279.4 4,322.8 4,492.2 4,444.7

Total Debt 2,423.9 2,155.2 2,140.4 2,209.8 2,038.9

CASH FLOW

Funds from Operations (FFO) 244.7 242.7 221.8 252.2 282.8

Capital Expenditures 96.7 76.1 165.5 244.5 143.9

Free Cash Flow (FCF) 124.5 156.6 41.1 5.2 131.3

Dividends 13.4 11.0 13.3 14.1 14.2

Retained Cash Flow (RCF) 231.3 231.6 208.5 238.1 268.5

FFO / Debt 10.1% 11.3% 10.4% 11.4% 13.9%

RCF / Debt 9.5% 10.7% 9.7% 10.8% 13.2%

FFO / Net Debt 11.0% 12.1% 11.1% 12.1% 14.7%

RCF / Net Debt 10.4% 11.5% 10.4% 11.4% 14.0%

FCF / Net Debt 5.6% 7.8% 2.1% 0.3% 6.8%

INTEREST COVERAGE

EBITDA / Interest Expense 3.7x 4.2x 4.4x 4.4x 4.3x

(FFO + Interest Expense) / Interest Expense 3.7x 4.2x 4.2x 4.2x 4.1x

LEVERAGE

Debt / EBITDA 7.3x 6.7x 7.1x 6.4x 5.2x

Net Debt / EBITDA 6.7x 6.3x 6.6x 6.0x 4.9x

Debt / Book Capitalization 58.4% 52.3% 51.5% 50.8% 47.1%

All figures and ratios are calculated using Moody’s estimates and standard adjustments. FYE = Financial year-end; LTM = Last 12 months.Source: Moody’s Financial Metrics™

Ratings

Exhibit 16

Category Moody's RatingLANDSVIRKJUN

Outlook StableSenior Unsecured Baa1Other Short Term (P)P-2

Source: Moody's Investors Service

Endnotes1 Our Base metals outlook (June 2019).

11 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THERELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITYMAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEEMOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’SRATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDITRATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAYALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDITRATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONSARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONSCOMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONSWITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDERCONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FORRETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACTYOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW,AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTEDOR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANYPERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSESAND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as wellas other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information ituses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for anyindirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use anysuch information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of aparticular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents,representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDITRATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as tothe creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it feesranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1202494

12 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

13 20 November 2019 Landsvirkjun: Update following rating upgrade

This document has been prepared for the use of Signy Sigurdardottir and is protected by law. It may not be copied, transferred or disseminated unlessauthorized under a contract with Moody's or otherwise authorized in writing by Moody's.