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Finland's Fennovoima may tap reactor supplier for investment
November 6, 2012 / 4:56 PM / 5 years ago

Finland's Fennovoima may tap reactor supplier for investment

HELSINKI (Reuters) - Finnish nuclear consortium Fennovoima may ask the potential supplier of its planned reactor to also invest in the project as it strives to keep the programme on track following the withdrawal of its biggest backer.

Fennovoima is due to choose next year between potential suppliers Areva SA AREVA.PA or Toshiba Corp (6502.T) to build its planned reactor in Pyhajoki, northern Finland, the first reactor site announced after the disaster in Fukushima, Japan.

Chief Executive Juha Nurmi said either of those could also become an investor, allowing it to move forward with a plan which is important in Finland’s drive towards greater energy self sufficiency.

“If you look at a lot of the projects of this scale, in many projects, the ... suppliers have been involved to some extent,” Nurmi told Reuters in an interview on Tuesday.

He cited an investment by Japan’s Hitachi Ltd (6501.T) in British nuclear project Horizon when it took over from E.ON AG (EONGn.DE) and RWE AG (RWEG.DE).

Toshiba declined to comment and Areva was not immediately available for comment.

Nurmi was appointed CEO on October 25, shortly after E.ON, which was its biggest single shareholder with a 34 percent stake, said it would withdraw from Finland.

E.ON’s exit raised doubts over the future of Pyhajoki, which is aimed at providing cheap energy to shareholders such as stainless steel maker Outokumpu (OUT1V.HE), retailer Kesko KESBV.HE and subsidiaries of Swedish metals firm Boliden (BOL.ST).

Nurmi declined to elaborate on the possibility of investment from Areva or Toshiba. He said other deals were also possible and that talks were being held with potential investors, adding that existing owners could also increase their stake.

He said he was confident Fennovoima could proceed with the project, originally estimated to cost between 4 billion euros ($5.1 billion) and 6 billion.

MORE NUCLEAR

“The fundamental reasons and the needs for this project have not changed,” he said, adding that a new owner to replace E.ON should be in place by mid-2013. “We are confident that we are able to overcome the challenges because the needs and the basis is unchanged.”

Finland has stuck by its plan to build more nuclear energy despite decisions by Germany, Switzerland and Belgium to shift away from nuclear power and instead focus on renewable energy.

The small Nordic country is aiming to become more self-sufficient in energy and rely less on imports from neighboring Sweden and Russia. Around 26 percent of electricity used last year came from nuclear plants.

Some analysts have said it will be tough for Fennovoima to find new partners outside those already involved with the project.

“If E.ON had seen the business case of this greenfield project as highly lucrative, it’s difficult to think they would have walked away,” said Teemu Vainio at brokerage Pareto.

Vainio said potential investors may be put off by delays and ballooning costs at Olkiluoto 3, Finland’s fifth reactor being built for Teollisuuden Voima. That project is some five years behind its original schedule.

Finnish utility Fortum FUM1V.HE is interested in building more reactors. But its Chief Executive Tapio Kuula told investors earlier on Tuesday that it may eventually seek permission to build a new reactor in Loviisa, southern Finland, signaling a lack of interest in Pyhajoki.

($1 = 0.7823 euros)

Additional reporting by Mari Saito in Tokyo and Muriel Boselli in Paris; Editing by James Jukwey and David Holmes

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