HELSINKI Finnish nuclear consortium Fennovoima said it had signed an expected deal with Russia's Rosatom to build and invest in its 1,200 megawatt reactor, planned to begin operations in northern Finland in 2024.
The reactor, estimated to cost up to 6 billion euros ($8.2 billion), is intended to secure cheap energy for the members of the consortium, including steel company Outokumpu (OUT1V.HE), retailer Kesko (KESBV.HE) and some 40 other Finnish industrial companies or utilities.
Rosatom will however take a 34-percent stake in the consortium and thus fill a funding hole left by Germany's E.ON (EONGn.DE), which last year left the project as part of its strategic review. Fennovoima did not disclose the value of the Saturday's agreement with Rosatom.
The Rosatom deal is still conditional as it requires an approval from all Fennovoima shareholders. The plant's final investment decision is due to be done in February.
The reactor project has been overshadowed by concerns about costs, particularly given the weak finances of many of its Finnish members. Fennovoima last month said 15 of its 60 shareholders had decided to give up their shares in the project.
The consortium is expecting the remaining shareholders to increase their stakes and said it may take on new members to secure the required capital.
Jan Vapaavuori, the Finnish minister of economic affairs, on Saturday said he was happy to see the project proceeding.
"In this economic situation, new foreign investments to Finland are very welcome," he said in a statement.
Politics has been another focus of uncertainty for Fennovoima. Some lawmakers have called for a new permit vote for the reactor since original plans had mentioned only France's Areva (AREVA.PA) and Japan's Toshiba (6502.T) as possible suppliers, and they had since been dropped in favor of Rosatom.
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(Reporting by Jussi Rosendahl; Editing by Alison Williams)