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Finland’s Fennovoima ends plans for Russian-built nuclear plant
Global Banking & Finance Review®
Company
By Anne Kauranen
HELSINKI (Reuters) – Finnish-led consortium Fennovoima said on Monday it had terminated a contract for Russia’s state-owned Rosatom to build a nuclear power plant in Finland, citing delays and increased risks due to the war in Ukraine.
The announcement ended months of uncertainty over the planned plant in Finland’s cape of Hanhikivi, a project which has been dogged by hold-ups and political wrangling.
Fennovoima said it had terminated the contract due to RAOS Project’s “significant delays and inability to deliver the project,” referring to Rosatom’s Finnish subsidiary.
“The war in Ukraine has worsened the risks for the project. RAOS has been unable to mitigate any of the risks,” it added, without going into further detail.
Raos Project declined to comment and Rosatom itself did not immediately respond to emailed requests for comment.
The planned Hanhikivi plant was commissioned by Fennovoima, a consortium in which Finnish stakeholders including Outokumpu, Fortum and SSAB own two thirds. Rosatom’s subsidiary RAOS Voima holds the rest.
The future of the nuclear plant had been unclear since Russia’s attack on Ukraine in February forced the Finnish government to rethink the project. The final construction permit was due to be granted by the end of 2022.
Since the offensive, which Russia calls a “special military operation”, Finland’s minister of economic affairs Mika Lintila has repeatedly said it would now be “absolutely impossible” for the government to grant the permit.
“Fennovoima’s decision is clear. There’s reason to be satisfied with the owners’ decision. It would have been practically impossible to carry on with the project,” Lintila wrote on Twitter on Monday following Fennovoima’s announcement.
Finland shares a 1,300-km (810-mile) border with Russia. The conflict has pushed Finland and neighbouring Sweden to the verge of applying for NATO membership.
Fennovoima’s management said it was too early to speculate on what could happen next and whether it would seek another partner to complete the power plant.
“I think there will be need for nuclear power also in the future but that’s only my personal opinion,” the chairman of Fennovoima’s board, Esa Harmala, told reporters.
Fennovoima also said it was not yet possible to say what would happen to Rosatom’s holding in Fennovoima.
The cost of the planned facility was initially set at 7.5 billion euros ($7.89 billion) and Harmala said the consortium had already spent 600-700 million euros on the facility.
He gave no estimate of the subsequent write-downs for Fennovoima’s owners.
Fennovoima said its cooperation with RAOS Project would end with immediate effect.
($1 = 0.9504 euros)
(Reporting by Anne Kauranen and Essi Lehto, Editing by Louise Heavens, Kirsten Donovan and Andrew Heavens)
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