Finland Drops Nuclear Plant Deal With Russian Energy Company

(Bloomberg) -- Finland’s Fennovoima Oy dropped a contract with a Russian energy company for the delivery of a nuclear power plant under construction in the Nordic country.

The deal with a unit of Rosatom Corp. ends immediately, Fennovoima said in a statement on Monday, citing “significant and growing delays during the last years” and the company’s inability to mitigate the project’s growing risks as a result of Russia’s war.

The decision removes a conundrum for Finnish policy makers who had been looking for a legal way to prevent Russia from operating the country’s critical infrastructure. Economy Minister Mika Lintila had already said he wouldn’t propose a construction permit for the unit.

The cost of the entire power-plant project, called Hanhikivi-1, was expected to be 7 billion euros ($7.4 billion) to 7.5 billion euros.

Finland has a 1,300-kilometer (800-mile) border with Russia and has begun a rethink of its security setup after Russia’s invasion of Ukraine. It’s considering joining the NATO defense alliance and also reducing dependence on Russian energy. Power grid operator Fingrid Oyj recently reduced power imports from Russia to ensure the network’s stability in case of a sudden halt in electricity flows.

Finland’s economy ministry said on Monday that terminating the contract is justifiable, according to an emailed statement. The ministry plans to review the implications to the project in the near term, it said.

Fennovoima had initially been given a green light by the parliament in 2010, when it was led by EON SE. The German utility withdrew from the project in 2012, and in 2013, Rosatom stepped in. About a third of the project now belongs to Rosatom. Other owners include a plethora of Finnish energy and industrial companies, many of which have recently written down their entire stakes in the project.

(Adds information on the project)

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