Fortum announced in a press release on Wednesday that it is not prepared to participate in the nuclear power plant project pursued by Fennovoima due to its failure to agree on the takeover of the hydro assets of TGC-1, a regional energy company operating in north-western Russia.

Kari Kautinen, the director responsible for strategy and mergers at Fortum, stressed to Helsingin Sanomat that the energy utility is nevertheless committed to its negotiations with Rosatom over the establishment of a joint hydro-power venture.

The negotiations fall within the purview of Kautinen, who declined on Wednesday to speculate on how far apart the negotiating parties are from each other and when an agreement could be found.

Olli Rehn (Centre), the Minister of Economic Affairs, stated in a bulletin that the Ministry of Employment and the Economy will not comment on the nuclear power project until it has received a building permit application from Fennovoima. The application is due next Tuesday.

The negotiations over the hydro-power venture have whipped up interest in Finland particularly due to their implications for the nuclear power project of Fennovoima. Fortum has stated that it will acquire a stake in the nuclear consortium only if it can take an absolute majority in its joint venture with Rosatom.

The energy utility has already made some concessions: it is currently seeking a stake of at least 50 per cent instead of the 70 per cent it cited as a condition last December. This implies that the ownership structure has proven an obstacle in the negotiations.

Kautinen refused to confirm this conclusion on Wednesday. “This is a complex case, as we have to re-structure an old company. That includes a number of questions,” he said.

He also dismissed the criticism levelled at Fortum for making its participation in the nuclear power project conditional on its own ventures in Russia.

“I won't comment on Fennovoima because we aren't a shareholder yet. Their decision-makers know what they're doing,” he said.

Fortum would control roughly 40 hydro-power plants between St. Petersburg and Murmansk if an agreement on the joint venture with Rosatom is found.

Fennovoima must file a permit application for the construction of the Hanhikivi Nuclear Power Plant with the Ministry of Employment and the Economy by 30 June. The application can only be granted if a minimum of 60 per cent of shares in Fennovoima are held in Finland or within the European Union.

The target is likely to prove elusive without Fortum.

A spokesperson at the Ministry of Employment and the Economy reminded in an interview with Helsingin Sanomat that the condition must be unequivocally met by the time the application is filed.

Fortum, Gazprom Energoholding and Rosatom agreed to re-structure the assets of TGC-1 last December. Fortum would as part of the re-structuring establish a joint venture with Rosatom to take control of the hydro assets of TGC-1. Its objective is to convert its 29.5 stake in TGC-1 to a majority stake in the joint hydro-power venture.

Teemu Luukka, Heikki Arola – HS
Aleksi Teivainen – HT