Setback for Finland’s Fennovoima NPP

16 January 2017

The proposed Finnish Hanhikivi 1 NPP suffered another setback in January as a court cleared the way for the pullout of a major domestic investor, the second-largest retail group, Kesko.

The owner/operator of the planned NPP, Fennovoima, is 66% owned by Voimaosakeyhtiö SF, a consortium of 60 Finnish companies. The other 34 % is held by RAOS Voima Oy, a subsidiary of Russian state nuclear corporation Rosatom, which plans to build a 1,200MWe AES-2006, Russian-designed pressurised water reactor in Pyhäjoki for operation around 2024.   

Fennovoima plans to start building the plant in 2018 provided it has obtained the necessary permits. Voimaosakeyhtiö SF will always remain Fennovoima's majority owner and this is ensured in the shareholder agreement. Voimaosakeyhtiö  reached agreement with Rosatom after German power company E.ON abandoned the project . The project has yet to be issued a construction permit by the Finnish government, which stipulates that at least 60% of the company must be owned by Finnish or EU-based companies.

On 10 January, a court of arbitration rejected a case filed by Voimaosakeyhtiö SF against Kestra, a real estate agency owned by Kesko. Finland’s largest retail group, the S-Group, previously withdrew from the Fennovoima consortium and the company's biggest dairy concern, Valio, also wants to withdraw, according to Finnish press reports. In March 2014, when it owned 4.5% of the share capital of Voimaosakeyhtiö, Kestra announced its intention to withdraw from the Hanhikivi 1 project, but Voimaosakeyhtiö claimed Kestra had committed to invest in the project and began arbitration proceedings against it in December 2015.  The K-Group currently holds an approximately a 3% stake in the project, which has an estimated to cost €6-7bn ($6.5-7.5bn).

Currently basic infrastructure is being laid in at the Hanhikivi site while Fennovoima awaits a construction permit. Fennovoima has decided on routes for the power lines connecting its planned Hanhikivi 1 nuclear power plant to the national grid. The plant is to be connected to the grid with 110kV and 400kV power lines at the Hanhela and Valkeus substations. More detailed design of the power line routes has begun, Fennoivoima said recently, and will continue until 2018. Construction of the power lines is scheduled in 2019-2023. 



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