Fortum Plans Significant Investment In Hanhikivi Nuclear Project

Posted by NucNet on 3 December 2014 in NucNet

Tagged with: Fennovoima, Finland, Fortum, Gazprom, Hanhikivi-1, Rosatom, Russia.

Plans & Construction

Finland’s biggest electricity company, Fortum, is ready to make a significant investment in Fennovoima’s planned Hanhikivi nuclear power station in northern Finland. The deal would increase domestic ownership in the planned facility to over 60 percent and potentially take the project one step closer to final government approval.

Fortum said it is willing to take a 15 percent minority share in the project, conditional on the restructuring of its ownership of TGC-1, a power company based in Saint Petersburg, Russia.

Fortum, which owns the two-unit Loviisa nuclear station in Finland, said it had signed a protocol with Gazprom Energoholding to start a restructuring process of its ownership of TGC-1, which owns and operates hydro power and thermal power plants in northwest Russia as well as heat distribution networks in Saint Petersburg.

Gazprom Energoholding owns 51.8 percent of TGC-1 shares and Fortum 29.5 percent.

As part of the planned restructuring, Fortum will establish a joint venture with Russian state nuclear corporation Rosatom to own the hydro assets of TGC-1, while Gazprom Energoholding continues with the heat and thermal power businesses of TGC-1.

By using its present stake in TGC-1, Fortum would obtain 75 percent ownership in the new hydro power company.

Fortum said provided it obtains the majority stake in TGC-1 hydro assets, it would be ready to participate with a minority stake of up to 15 percent in the Hanhikivi nuclear station on the same terms and conditions as the other Finnish companies participating in the project.

Economy minister Jan Vapaavuori said Fortum’s planned 15 percent stake would clearly fulfill the requirement he set for the project — that it have at least 60-percent domestic or European ownership.

“Fortum’s announcement is important news for the Fennovoima nuclear project. The Fortum arrangement clearly fulfills the criterion laid down by the cabinet that the project should have 60 percent domestic ownership, and at the same time increases Fennovoima’s domestic ownership to the original goal of 66 percent,” Mr Vapaavuori said.

In September 2014, Finland’s government approved in principle an application by Fennovoima for a construction licence to build Hanhikivi-1, a Russia- supplied 1,200 megawatt AES-2006 pressurised water reactor. Fennovoima said the unit could begin commercial operation in 2024.