Finnish ownership of Fennovoima assured

05 August 2015

Finnish ownership of Fennovoima, which plans to build the Hanhikivi 1 nuclear power plant, now exceeds 65% following new financial commitments from three domestic companies. The processing of Fennovoima's construction licence application can now proceed.

Fennovoima announced today that the three companies - Fortum, SRV and Outokumpu - will participate in the project by either taking new shares or increasing their existing stakes in Voimaosakeyhtiö SF, Fennovoima's principal shareholder.

Energy company Fortum has agreed to take a 6.6% stake in the Hanhikivi 1 project on the same terms and conditions as the other Finnish companies participating in it. The company - which owns the Loviisa nuclear power plant and holds a share in the Olkiluoto plant - had earlier said that its participation in the project was dependent on the outcome of negotiations with Rosatom and Gazprom Energo on restructuring Russia's territorial generating company TGC-1. However, it noted that those negotiations are still ongoing.

Fortum's interim CEO Timo Karttinen said, "Fennovoima is an important project for the Finnish people. At the same time, nuclear power is one of the key areas of Fortum's strategy and our core competence together with hydro and combined heat and power production." He added, "With our participation, the Fennovoima project will be able to utilize Fortum's wide expertise of the nuclear sector and our technical know-how."

Construction and project management company SRV has agreed to take a 1.8% stake in the Fennovoima project. As part of the package, SRV has signed a project management agreement with Fennovoima's plant supplier Rusatom Overseas and the main contractor Titan-2. SRV said it will act in the project primarily as project manager, particularly with respect to Finnish partners, together with Titan-2.

SRV president and CEO Pekka Ojala said, "The project required the participation of a reliable Finnish partner familiar with local legislation and regulations. SRV has strong experience of project management and we have been well acquainted with Fennovoima's nuclear power plant project for a long time now."

Meanwhile, stainless steel maker Outokumpu has decided to increase its share in the project from 12.3% to 14.1%. The company said its share of investment is expected to increase from €210 million ($228 million) to €250 million ($272 million). It noted that about half of the investment is "expected to be realized only at the end of the construction phase in 2022-2023".

Outokumpu CEO Mika Seitovirta said, "Outokumpu has been involved in Fennovoima since its foundation - the competitiveness of the Finnish industry requires adequate energy self-sufficiency and healthy competition in the electricity market." He noted, "Our mills in Tornio are the single largest electricity user in Finland. Therefore it is in our interest to secure stable and reliable energy sources with no or low carbon emissions. With Fennovoima, we will be able to cover approximately one-third of our electricity demand in the Nordic at production cost."

Licence application review

Fennovoima said it has submitted an update regarding ownership to Finland's Ministry of Employment and the Economy. The ministry has earlier questioned the ownership of Croatia's Migrit Energija, whose subsidiary Migrit Solarna Energija had proposed taking a 9% stake in Voimaosakeyhtiö. With the increased participation of Finnish companies, Migrit Energija is no longer listed as a participant in the project.

"Taking into account the latest financial commitments, domestic ownership of Fennovoima now stands at 65.1% and meets the ownership conditions set by the Finnish government and parliament," Fennovoima said.

RAOS Voima Oy, a Finnish subsidiary set up in 2013 by Russia's Rosatom specifically to hold a stake in the company, holds 34% of Fennovoima.

The ministry said today that it will now proceed with a review of Fennovoima's construction licence application for Hanhikivi 1 now that "sufficient assurance that the national ownership condition for at least 60% of the company's ownership has been met".

Fennovoima submitted its licence application to the ministry on 30 June for the planned Hanhikivi project. The ministry said that processing of the application is expected to take at least two years.

Fennovoima aims to start building the plant - based on a Russian-designed AES-2006 VVER that would produce 1200 MWe - in 2018 with operation beginning in 2024.

Researched and written
by World Nuclear News