Rosatom not looking to increase stake in Hanhikivi

02 June 2015

Russia’s Rosatom does not plan to increase its stake in the Hanhikivi nuclear power plant project in Finland, the state nuclear corporation's deputy director general, Kirill Komarov, said yesterday. Komarov was responding to questions during a press conference at the VII Atomexpo 2015 conference and exhibition in Moscow.

The Hanhikivi 1 construction project in Pyhäjoki in northern Finland is scheduled to start generating electricity by 2024. The Finnish government has said that a construction licence for the project will only be issued once Finnish ownership is more than 60%, which must be achieved before the end of June 2015.

"The equity structure of 34% for Rosatom and 66% for Finnish companies has not changed. Indeed, the Finnish consortium is thinking probably to expand its membership so that other Finnish investors could step in [to the project]," Komarov said.

"At Rosatom, we don't plan to build up our 34% and we feel quite comfortable with the role we are playing. The project will be based on Russian technology and we are happy to be a minority equity partner because Finland has sustainable and long-term experience in nuclear, so it is logical for Finnish companies to have the controlling stake. The project is progressing smoothly and the licensing procedure and preliminary preparation of the construction site for work to start as soon as the licence has been obtained have both begun. Contracts with suppliers have been signed and they are now being audited by Fennovoima and the Finnish regulator STUK."

Finland's Voimaosakeyhtiö SF said in April it had increased its share in the project to 55.5% from 50.2%, while Fortum said in December that it would be ready to participate with a minority - maximum 15% - stake, provided that Fortum obtains a 75% or more ownership in the hydro assets of Russian territorial generating company TGC-1.

Fortum generates, distributes and sells electricity and heat, and offers related expert services. Its operations focus on the Nordic and Baltic countries, Russia and Poland. The Espoo-headquartered company said it would participate in the Hanhikivi 1 project on the same terms and conditions as the other Finnish companies currently participating in it.

Komarov said that "negotiations are underway so that Fortum could intervene [in the consortium], but it would be premature to comment on that."

He noted that the Hanhikivi project was the only one of Rosatom’s foreign projects to which the Russian government has allocated money from the country's sovereign wealth fund. "It's very important that the government decided to allocate resources from the fund because this project assumes investment by Rosatom."

Russia's Cabinet of Ministers in January approved up to RUB150 billion ($2.3 billion) in funding for Hanhikivi 1, following Russian ministerial approval on 30 December. The project was placed on the fund's list of "self-supporting infrastructure projects in terms of financial assets". Atomenergoprom is named as the "initiator" of the project. Part of the Russian state nuclear corporation Rosatom, Atomenergoprom is a 100% state-owned holding company that unites the country's civilian nuclear industry.

The National Wealth Fund - as it is known in Russia - will allocate the Hanhikivi 1 project RUB35.5 billion ($549 million) in 2015, RUB51.2 billion ($792 million) in 2016 and RUB41.3 billion ($638 million) in 2017. There have been no details of when the remaining RUB22 billion ($339 million) would be allocated. Most of the funding will take the form of a loan guaranteed by export credit agencies, while the remainder will be other loans.

Russia and Finland in February 2014 signed a new intergovernmental agreement on nuclear energy cooperation - a prerequisite for Russia to supply a reactor unit for the Hanhikivi project. Fennovoima had signed the plant supply contract for Hanhikivi with Rusatom Overseas - Rosatom's subsidiary concerned with exports of nuclear power plants - in December 2013. Rosatom has offered to build a plant using a Gidropress-designed AES-2006 VVER that would produce 1200 MWe.

Rosatom agreed to take a stake of 34% in the project, the major share previously held by Germany's EOn, and support the project by arranging debt finance for the plant's construction.

Researched and written
by World Nuclear News