Fennovoima cancels supplier contract for nuclear plant

Fennovoima cancels supplier contract for nuclear plant

The Russian state-owned company said that the decision was unilateral, without lending an ear to RAOS Voima, because the project has progressed well and the co-operation between the participants has been well-established.

We reserve the right to defend our rights in accordance with the applicable contracts and laws. Fennovoima has announced it will terminate its supplier contract for the nuclear power plant with Rosatom, saying RAOS Project, the Rosatom subsidiary that was to deliver the plant, has experienced delays that warrant questioning its ability to see through the project.

The Russian war in Ukraine has caused the Finnish nuclear energy company to pay attention to the growing risks associated with the project.

CEO Joachim Specht said everyone at Fennovoima is sad and disappointed. This is not what we wanted to do. We wanted to deliver this project. He said in a news conference in Helsinki that with this setup we won't accomplish that.

The design and licensing work at the construction site has ended with immediate effect, but Rosatom remains a shareholder in Fennovoima, with a stake of roughly 34 per cent through RAOS Voima. The remaining shares in the company are owned by Voimaosakeyhti SF, a consortium of companies and municipal energy utilities of all sizes in Finland.

Specht acknowledged in a press release that the termination of the engineering, procurement and construction contract will have a significant impact on the employees and supply chain of Fennovoima.

We will have people on the payroll, but we have to follow the change negotiation and reduce our staff until the end of the year. How many people will remain on the payroll? He said that it is too early to give any accurate or credible figures on that.

Specht said that the company's focus is on preserving the construction site.

He said that the preservation of the site means first suspending activities related to our formal engineering, procurement and construction contractor and secondly to conclude in a controlled and defined way the activities Fennovoima itself conducts on the site, like the erection of the administration building.

It has to do a lot with collecting the relevant site data or relevant information in order to maintain a maximum level of information and, in this condition, preserve the site for potential future activities. Both Specht and Esa Hrm l, Chairperson of Fennovoima, underlined that the primary reason for terminating the cooperation was not Russia's invasion of Ukraine.

We base our decisions on facts and the fact that this contract has been suspended due to delays and inability to deliver. Hrm l It s not a single event that the war has increased these risks, echoed Specht. It has happened for years and the lack of capabilities and delivery capabilities has accumulated. A stakeholder contributes a share equivalent to their stake in the nuclear energy company, with over 600 700 million euros already poured into the project, according to Hrm l.

The Finnish Ministry of Economic Affairs and Employment on Monday praised the decision to terminate the delivery contract.

The Ministry of Economic Affairs and Employment considers the owner's decision regarding the plant delivery contract to be justified and consistent. The termination of the contract is an understandable measure in this situation, it said in a press release.