EON Exit From Finnish Nuclear Reactor May Trigger Failure via Bloomberg

EON AG’s plan to pull out of a joint venture that’s building a nuclear reactor in Finland increases the risk that the project may fail, thwarting the government’s plans to cut reliance on energy imports.

EON, Germany’s biggest utility, is seeking to sell its 34 percent stake in Fennovoima Oy by the first quarter and focus on operations in Sweden and Denmark, it said on Oct. 24. Fennovoima is preparing to start construction on the reactor, with a capacity of 1,600 to 1,800 megawatts, at Pyhaejoki in northern Finland in late 2016.

“It is entirely possible that Finland’s Fennovoima project will fail as a result of EON’s exit,” Timo Vainio, an analyst at Pareto Securities ASA in Helsinki, said by e-mail.

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“Despite EON’s exit, we maintain a firm belief and trust in finding takers for their share,” he said by phone Oct. 30 from Helsinki, without elaborating on potential buyers.

There are 62 other companies involved in the project, which plans to sell power at production cost for the lifetime of the plant to its shareholders. Voimaosakeyhtioe SF, a joint venture of the smaller investors who collectively own 66 percent of the project, has begun talks with EON about future ownership, according to Ottavainen, the chief executive officer of Voimaosakeyhtioe SF.

Finnish stainless-steel maker Outokumpu Oyj “remains committed” to the project, Chief Executive Officer Mika Seitovirta said Oct. 24. Outokumpu has a 10 percent stake in the project, according to its website.

Finland’s Teollisuuden Voima Oyj is building the 1,600- megawatt Olkiluoto-3 reactor, which will be the world’s biggest once it is completed roughly six years behind schedule in 2015. A fourth Olkiluoto unit is planned.

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