Fortum to invest in Hanhikivi nuclear plant

2 December 2014

Finnish utility Fortum has announced a restructuring plant that could see it take a minority stake in Fennovoima's Hanhikivi nuclear power project.

Fortum has signed a protocol with Russia's Gazprom Energoholding to begin restructuring of their ownership in TGC-1, a territorial generating company that owns and operates 40 hydropower plants and 14 thermal power plants in northwest Russia, as well as heat distribution networks in St. Petersburg. Gazprom Energoholding currently owns owns 51.8% of the TGC-1 shares and Fortum 29.5%.

As part of the restructuring proposal, Fortum will establish a 75:25 joint venture with Russia's state nuclear corporation, Rosatom, to own the hydro assets of TGC-1. Gazprom Energoholding will continue with the heat and thermal power businesses of TGC-1.

"Provided that Fortum obtains a 75-plus-percent ownership in TGC-1 hydro assets, Fortum would be ready to participate with a minority stake (max 15%) in the Finnish Fennovoima nuclear power project on the same terms and conditions as the other Finnish companies currently participating in the project," the company said.

Fortum president and CEO Tapio Kuula said involvement in the project would provide Fortum with possibilities to grow its nuclear expert services.

Fennovoima plans to build a AES-2006 nuclear power plant with a VVER-1200 reactor at Pyhäjoki Northern Finland, which will begin electricity production in 2024.

Rosatom owns a 34% stake in the project and Finland's Voimaosakeyhtiö SF owns the remaining 66%. The Finnish government has set a condition that domestic ownership in the project must be at least 60% by the time Fennovoima submits a construction licence application at the end of June 2015. Currently 55.5% of the shares in Voimaosakeyhtiö SF are reserved by Finnish companies.

Photo: Illustration of the AES-2006 nuclear plant (Source: Rosatom)

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