The Karahnjukar dam has been the cause of much debate in a country that takes great pride in its unspoiled ecology and the cleanliness of the natural environment.
Both negative and positive coverage has greeted the plans to flood a valley and reroute a river, which in some quarters are considered a fait accompli.
Two species will be directly affected by the project. Sigurdur Arnalds, public relations manager for national power company Landsvirkjum, says: 'The impact on wildlife is limited. The population of pink-footed geese has increased by 10 times in the last 10 to 15 years. Don't forget this is a game bird so tens of thousands are slaughtered. The nests that will be drowned by the lake are less than 1%, which is insignificant as they can easily move somewhere else.
'The other animal that is slightly affected is the reindeer, but they are controlled by hunting as the east of Iceland can only take so many. We have the risk of overpopulation of them so they are not endangered. The reservoir is a change of landscape; we are taking water from one valley and putting it into another.'