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Fennovoima gets new Croatian owners, hits permit deadline—but questions remain

The nuclear power company Fennovoima submitted an application for building permits at the last possible moment on Tuesday, saying it had—just—met the requirement laid down by parliament for 60 percent of the company to be owned by companies from the EEA. Russia’s Rosatom is contracted to provide the reactor, and also owns 35 percent of Fennovoima stock.

Fennovoiman toimisto Pyhäjoella.
Fennovoima just beat a 30 June deadline to hand in an application for a building permit for the Pyhäjoki nuclear reactor. Image: Lehtikuva

The troubled Fennovoima project has secured a new shareholder that the company claims ensures it meets the demand that 60 percent of the project is owned by companies from the European Economic Area. The new owner emerged as the company submitted an application for building permits for the plant, currently slated for Pyhäjoki in North Ostrobothnia, right on the 30 June deadline.

The new investor is Croatian power company Migrit Energija, which will hold a nine percent stake in Fennovoima. Minister for Economic Affairs Olli Rehn said in a press conference on Tuesday that he had only heard on Monday that the Croatian firm was involved in Fennovoima. Rehn said that the building permit process would include a thorough investigation of whether the Croatian firm meets all the requirements set out in the permit process.

The company’s website says that it was founded in 2012 with a goal of investing in renewable energy, especially solar, wind and wave power. It also sponsors an inline hockey team due to compete in Tampere in July, but that aside the company is new to Finland and observers of the Finnish energy market.

Fortum on the sidelines

The ownership requirement was laid down by parliament after the Russian firm Rosatom was named as both contractor to provide the reactor and a 35 percent stakeholder in the company. In the Finnish media, the requirement has been framed as a demand for ‘domestic ownership’, although legally the requirement has to treat EU and EEA companies the same as Finnish ones.

Finnish utility Fortum was in talks to take a 15 percent stake in the project, but had linked its participation to progress on a hydropower venture with Russia’s Gazprom in Russian Karelia. That deal hadn’t progressed, and so Fortum has not taken the stake in Fennovoima.

The project has been a cause for concern in Finland, where Rosatom’s participation has raised fears of Russian interference in Finnish domestic affairs. Even though no final building permits have been issued, the company has started preparatory work at the Hanhikivi site, to the dismay of anti-nuclear campaigners camped out in the area.

Geostrategic motivations?

"Rosatom has different motivations, that’s for sure," said researcher Antto Vihma of the Foreign Policy Institute, who says that the firm is keen for a western user case for their exportable nuclear reactors.

"But they might also have a strategic motivation to increase Finnish energy dependence on Russia since Rosatom is basically directly under Kremlin power as it was previously the Russian Atomic energy ministry."

"Russia wants to divide the EU policy line, that has been Russia’s interest for a long time, and certainly Russia has been using energy policies to do that within the EU, to use energy as a centrifugal force," added Vihma.

The Finnish energy mix is deceptively Russia-focused. Finland imports 100 percent of its natural gas from Russia, but that gas is mostly used by utilities that can easily switch to other fuels. Finland is therefore not as dependent on Russia as central European countries that use gas for heating and have no alternatives.

"Striking contrast"

A lot of oil does come from Russia, but the infrastructure exists to buy that oil on the world market instead if necessary. A nuclear power plant, however, is a multi-decade commitment that binds the two countries together.

Green MP Satu Hassi, speaking at an anti-Fennovoima protest on Tuesday, said that she was surprised a nuclear plant run by Rosatom had political support in Finland.

"Accepting a Russian built reactor, built by a company that's directly under the control of the Russian government and Putin is in striking contrast to our traditional energy policy argumentation," said Hassi.

Fennovoima has split the political class in Finland, with the Greens and Leftists opposed, the SDP split and the Centre and National Coalition largely in favour.

Ministerial burden

Last autumn the project caused Green Ministers to resign from the government, when Fennovoima was allowed to continue the application process without re-submitting the plans—which had altered drastically since the project included the German company E.On. Green leader Ville Niinistö compared attitudes around Fennovoima to the time of Finlandisation, a controversial statement given the loaded history of the word. 

"Of course Finland is now part of the EU and part of the west and it’s not under that much geopolitical pressure as it was, but certainly Russia has economic strings that it likes to pull in EU countries, and has a history of doing just that," said Vihma. "In this way there is an underlying concern that’s pretty widespread about Fennovoima."

That concern is now focused on a little-known energy firm registered in Zagreb. Officials looking into the company's background and financing are starting from a very low knowledge base, as Rehn pointed out in his press conference comments.

"The Ministry is going to be busy," said Antto Vihma on hearing the identity of the new investors.

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