Norwegian browser developer Opera Software is moving its data processing capacity to a newly-built center in Iceland, one of the first foreign investment deals for the crisis-hit island as it tries to rebuild its economy.

Iceland's economy has been in tatters since its banking system collapsed in late 2008, and turning the island into a hub for technology companies could be one way to rekindle foreign investment in the wake of the crisis.

The Thor Data Center, developed by Icelandic technicians with experience in the U.S. military, uses only renewable energy and will be able to handle 78 Petabytes of data -- equal to about a trillion Facebook pages, a Thor spokesman said.

The data storage industry has been a shimmering light of hope for the Icelandic economy, Anders Jonsson told Reuters on Friday. This represents an important turning point.

Last year Century Aluminum signed a deal with the Icelandic government to build a large smelter in Iceland, although the size of its investment remains to be determined, said Thordur Hilmarsson, managing director of Invest in Iceland.

Generally, interest for foreign investment into Iceland has grown in the past 6-12 months and the main reason is that the country is very competitive cost-wise at the moment because of the devaluation of the Icelandic crown, he said.

In a statement, the chief executive of Opera Software, which has 110 million customers, said renewable energy and Iceland's technical know-how were two main reasons behind the deal.

In coming years Iceland will be able to provide a more stable supply of energy than most other areas in the world, he said.

Thor said it expected to announce further deals in the near future and would soon have to expand its capacity. Neither Thor nor Opera were able to provide financial details for the deal, but Thor said it was worth several billion ISK.

One billion Icelandic crowns is worth about 7.8 million dollars.

(Editing by Jon Loades-Carter)