Finnish-Russian Nuclear Project at Risk

The crisis in Ukraine has made it difficult for Finnish-Russian venture Fennovoima to recruit new investors for its nuclear reactor project in western Finland, the head of its Finnish owners told the Tekniikka&Talous weekly.

The Finnish government has instructed Fennovoima, owned by around 40 Finnish companies and Russian state nuclear firm Rosatom, to increase local ownership after several investors pulled out of the 4-6 billion euro ($5.3-8 billion) project.

"If it were not for the Ukraine crisis, we would already have a group to present to the (economy) ministry. But we are still negotiating," Pekka Ottavainen, the head of the Finnish owners' consortium Voimaosakeyhtio SF, told the weekly newspaper.

"Fennovoima needs a home-stretch miracle," he said.

The Finnish group, which includes steel maker Outokumpu and a string of regional utilities, has committed to just over 50 percent of the venture, while the government requires a "clear Finnish majority" to be in place by September, Ottavainen said.

Voimaosakeyhtio SF is targeting 66 percent ownership. Rosatom, which is set to build the 1,200 megawatt reactor, currently holds 33 percent.

"At the moment it looks likely we will have to sell some more shares to Rosatom," Ottavainen said, but added that he was still having discussions with a few large institutional investors.

"They (investors) are keen to know whether there will be more international sanctions due to the Ukraine crisis. If there are, the (Fennovoima) model gets more and more complicated. Sanctions might come that hit our project directly."

The Pyhajoki reactor, which would be Finland's sixth, is scheduled to start operating in 2024. The Finnish parliament is due to vote again on the project later this year.

(1 US dollar = 0.7537 euro)

(Reporting By Jussi Rosendahl; editing by Jane Baird)