Finnish consortium cancels nuclear plant contract given to Rosatom subsidiary

Finnish energy consortium Fennovoima has cancelled a contract awarded to Russia’s Rosatom for the construction of a nuclear power plant.

The consortium cited operational and workforce risks linked to Moscow’s war in Ukraine as reasons for the termination of the engineering, procurement and construction contract.

The decision, enforced with “immediate effect”, means that the Hanhikivi 1 nuclear power plant – which was being developed by Fennovoima and Rosatom’s Finnish unit Raos Project – will no longer be delivered, the company said yesterday.

“Unfortunately, the termination of the EPC contract is estimated to have a significant employee impact in Fennovoima and is expected to impact also the supply-chain companies and Pyhajoki region,” chief executive Joachim Specht said.

“Our main objective is to support our employees by keeping them informed, and work in close co-operation with both our employees and employee representatives.”

The company is focusing on preserving the site, he said.

The future of the Hanhikivi 1 plant was thrown into doubt after Russia began its military offensive in Ukraine in February.

The final construction permit was supposed to have been granted by the end of this year but Moscow’s actions forced the Finnish government to re-evaluate the project. Mika Lintila, Finland’s Minister of Economic Affairs, said it would now be impossible for the government to grant the permit.

However, Raos Project insists on proceeding with the project.

Fennovoima chairman Esa Harmala acknowledged the negative effects that the company’s decision would have but pledged to mitigate them.

The total investment cost for the Hanhikivi 1 nuclear power plant was estimated at between €6.5 billion ($6.8bn) and €7bn.